Current Thoughts for 3/17/2016

From the Trading Desk

Gold traded lower for four consecutive days and looked like it was on the verge of collapsing below trendline support at $1,225 yesterday.  This was all until the FOMC statement came out at 11 AM PST and completely reversed gold’s fortunes.  The FOMC left rates unchanged and lowered the projected number of rate hikes from three to two.  The Fed cut 2016 GDP projections by .20% to 2.20% and trimmed 2017 GDP projections by .10% to 2.10%.  Apprehension over global economic and financial developments and the associated potential collateral damage from them appear to be the chief reasoning behind the dovish FOMC statement.

Market participants were expecting a more hawkish FOMC statement and the markets reacted accordingly.  The USD tanked while gold skyrocketed before finally slowing down in the low $1,260s.  Resistance is intact at $1,280 while solid support remains at $1,225.  Silver is finally making some moves of its own but encountered sizable selling around $16.  This is the near term target that needs to be cleanly broken in order to attract fresh buying.

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About Doug Eberhardt

Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534


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