BRIEF UPDATE ON GOLD AND CRUDE OIL (3:30 pm EST)
Today Federal Reserve Chairwoman Janet Yellen spoke before the Joint Economic Committee of Congress and made generally positive and upbeat comments about the state of the U.S. economy. She also made it clear that the governments's bond purchasing program (QE) would end in the fall if the economy stays on course. This "hawkish" tone and optimism about the economy had a depressing effect on precious metals (which are viewed as a safe haven in bad economic times). Gold and silver both dropped sharply (over 1.5%) which is in line with my recent short-term bearish view of these metals (see yesterday's blog). Despite Yellen's remarks, however, the long-term picture for gold and silver remains very bullish. At the moment it looks like a good buy spot in both metals could be setting up in the second half of this month. Still on the sidelines.
Crude oil broke and closed above $100 today. This price increase was apparently the result of weekly government data showing an unexpected drop in crude oil supplies contrary to expectations that inventory supplies would hit new highs. If this is the case, the rally may not get very far. There is resistance at $101 and I am not ready to give up my short position until that level is cleared. Maintaining my short position for now.
Today Federal Reserve Chairwoman Janet Yellen spoke before the Joint Economic Committee of Congress and made generally positive and upbeat comments about the state of the U.S. economy. She also made it clear that the governments's bond purchasing program (QE) would end in the fall if the economy stays on course. This "hawkish" tone and optimism about the economy had a depressing effect on precious metals (which are viewed as a safe haven in bad economic times). Gold and silver both dropped sharply (over 1.5%) which is in line with my recent short-term bearish view of these metals (see yesterday's blog). Despite Yellen's remarks, however, the long-term picture for gold and silver remains very bullish. At the moment it looks like a good buy spot in both metals could be setting up in the second half of this month. Still on the sidelines.
Crude oil broke and closed above $100 today. This price increase was apparently the result of weekly government data showing an unexpected drop in crude oil supplies contrary to expectations that inventory supplies would hit new highs. If this is the case, the rally may not get very far. There is resistance at $101 and I am not ready to give up my short position until that level is cleared. Maintaining my short position for now.
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