COMMENT ON TODAY'S FED STATEMENT (4:15 pm EDT)
The Fed decided to leave interest rates unchanged (i.e. at 0.25 - 0.5 %) for now and indicated that it will lift them more slowly this year than it had originally planned due to worries over a weak global economy and a volatile stock market. This somewhat dovish tone from the Fed lifted the broad stock market but plunged the U.S. Dollar Index showing that the Fed is willing to tolerate more inflation (no "hawkish surprise" from Ms. Yellen).
Not surprisingly the dollar plunge triggered a surge in precious metal prices. It is too early to tell if these volatile movements are just a short-term knee-jerk reaction to the Fed statements, but our stop loss at $15.80 for our short silver position has not yet been breached so we are still holding a short position in this metal. Yesterday's lows in gold and silver were not deep enough to be cycle bottoms so prices could reverse back down to make a lower corrective bottom to the medium-term cycle over the next few weeks (a cycle bottom in gold is due by then).
The Fed decided to leave interest rates unchanged (i.e. at 0.25 - 0.5 %) for now and indicated that it will lift them more slowly this year than it had originally planned due to worries over a weak global economy and a volatile stock market. This somewhat dovish tone from the Fed lifted the broad stock market but plunged the U.S. Dollar Index showing that the Fed is willing to tolerate more inflation (no "hawkish surprise" from Ms. Yellen).
Not surprisingly the dollar plunge triggered a surge in precious metal prices. It is too early to tell if these volatile movements are just a short-term knee-jerk reaction to the Fed statements, but our stop loss at $15.80 for our short silver position has not yet been breached so we are still holding a short position in this metal. Yesterday's lows in gold and silver were not deep enough to be cycle bottoms so prices could reverse back down to make a lower corrective bottom to the medium-term cycle over the next few weeks (a cycle bottom in gold is due by then).
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