From the Trading Desk
Market participants anxiously awaited results of the Federal Open Market Committee meeting yesterday and it did not disappoint in providing some fireworks. The Federal Reserve kept short term rates unchanged near zero but hinted at raising interest rates in the final meeting in December. In their statement, they cited becoming less concerned in recent weeks about the turbulence in financial markets and expressed indifference towards ambiguous overseas economic developments. They also pointed to solid growth rates in domestic business investment / consumer spending and improvements in housing as positive changes that may sway policy.
Gold had already been on a two week decline and yesterday’s FOMC accelerated the downward pressure. Gold was moving higher yesterday and completely reversed course in dramatic fashion post-FOMC. It collapsed through previous support at $1,160 and finished near the lows of the day. Today was a further continuation of liquidation for the yellow metal and the next major area of support is the convergence of the 50 and 100 day moving averages around $1,140. Silver has surprisingly held up better than gold recently and its 200 day moving average has acted as a point of gravitation over the past three weeks.
In lieu of today’s Current Thoughts, I offer the article I wrote that predicted the future drop in gold.
What Will Gold And The Dollar Do Next?
I will post this article for Newsletter subscribers tomorrow but loyal readers of the Current Thoughts get first access.
Bottom line is we are still going to fall in price folks. Even with lousy GDP gold falls. But at least the market listened to the data for once.
Make sure you read the comment section of the article as it adds insight into common objections I receive, especially from one poster.
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
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.