Gold Under Fire After FOMC Announcement

Gold: With the Federal Open Market Committee (FOMC) stating that they are going to keep US interest rates at a low level and continue quantitative easing, the dollar is under fire today. It has slipped against the six major currency pairs and gold is taking up the slack. In the meantime, gold has pared back some of its early week losses and is currently trading at $953/oz, up from a low of $941/oz yesterday.

The US dollar Index has fallen to 78.69 and the next level of support is 77.50 and then 76.0. Should the dollar fall below 76.0 we could see a further dollar decline back to the record low of 71.33 in April 2008. However, we could see another dollar rally prior to a further decline in its value.

Silver: Silver has also rebounded and is already up $0.21/oz this morning. It is currently trading at $14.74/oz.

Platinum Group Metals: Platinum is currently trading at $1,257/oz, palladium has moved up slightly to $270/oz and rhodium is $1,625/1,725/oz.

Disclosure: No positions

Comments

[Macro_Man]

Silver has been showing a lot of strength recently. Gold has been somewhat of a laggard. e.g., silver set a new high for August in overseas markets while Gold did not even come close. There is some strong buying in silver going on or there is some liquidation in gold that is keeping it down.

The reason I am still sticking with Silver shorts is, it is showing a lot of spike days...could be sign of a top if the market is not able to sustain those spike levels. Sooner or later market will have to go up strongly or will start to drop. We'll see. Been a tough position to hang on to....wrong enough to lose money, not yet wrong enough to cut and run :). I think this week will be determinative, Silver spiked up again to a new August high at 15.14, if it then drops quickly and steeply that has to be disheartening to the bulls. If it can form a flag or some continuation pattern above 15, think the shorts will bail.

2009 Aug 13 07:53 AM

[optionsgirl]

Right, Marco, "15" is the magic # for silver right now- it's got to stay above it and close above a few days in a row for us to know if we have a sustainable rally.

2009 Aug 13 08:02 AM

[capt Brian]

Technical trading is fine, made a bunch of money in the short term with the tea leaves (charts). I have made the bulk of the profits by simply adding to my PM physicals on price dips, and staying away from the general equity markets except day trades. Gold is slowly (and silver) moving up in response to the problems the dollar is manufacturing for itself. Social programs, being put on us will work until the money runs out. Then, like Rome, Russia, England and many others who have tried socialism, will not work here either. Somehow we allow our leaders to be the Judas goat. They are actually cutting their own throats along with ours. In the meantime, if the government does not rein in their spending, then it will result in the same effect as if we were spending more than we have [individually]. What basically has to happen is normal economic realities will surface, take control, and be apparent and will remain in power until things level out again. If ever. For those times ahead, unless the government takes all the gold, (which I feel they will not do because there is not enough to even make a dent in what is really owed or will be owed). In the meantime, as they ruin the dollar even more, the PM's will continue to move up. I have moved from junk silver and gold (commemoratives and 'things' of that ilk) to bullion bars rounds eagles (both silver and gold) and now switching this time to more sophisticated PM investment, rare coins. As I increase my holdings, it becomes more and more difficult to rationalize holding piles of metal. Storage becomes more and more expensive, and logistically difficult. So with good numismatics being the new thing, coins that are clearly collectables, [not just a pile of silver eagles or mine rounds] should not be taken by the government as they were left alone with the law as in the past. I feel that same template will be honored as the actual bullion gleaned from ruining collections would not solve much in the scheme of the debts they [the goverment] is piling up. Also, like diamonds [which I would never invest in], a nice rare coin can suck up a lot dollars, to be held while things sort themselves out. With our new auto tags going up 35%((in Florida) ( I just bought two years and the guy at the tag office told me to buy 2 years to avoid the increase next year) next year, taxes increasing to pay for all the new wonderful changes coming, ( and you can believe in that change, [more taxes]), it equals inflation, which will not be hidden. Look at the oil price up almost $2.00 today as I write this note. Don't you get the feeling that gold and silver (especially silver) which could become the new money, the global currency, will soon begin an interesting response to the programs happening worldwide? I, for one, see no problem with higher metal prices. nd that is the bottom line,. OH.. you want to know when, NOW stupid! look where gold was in Nov, and look where it is today. Forget the charts, gold is rising, I am buying on dips and holding.

Good luck America,
You are gonna need some luck, because the financial storm coming is gonna make the last 3 years look like the first dance.

Capt Brian
The lost navigator

2009 Aug 13 08:30 AM

[GMiki1]

Silver topping out? Good grief, no. Get out of those shorts and do more research with analysts such as Ted Butler and David Morgan. Yes, the PMs are rising. It doesn't happen in a day.

I can't believe how someone changed the headline to make gold look vulernable when it's the dollar that is hitting the skids.

2009 Aug 13 08:53 AM

[ScroogeMcduck]

What do you guys think about (SVM) as a play on silver?

In FY2009 (ended March 31, 2009), the company produced a record of 4.2 million ounces of silver at a cash cost of negative $2.77 per ounce and have no long term debt.
www.silvercorpmetals.com/

2009 Aug 13 01:03 PM

[H. T. Love]

Yours was repeated because of a bug in SA software. When multiple posts hit close enough to each other, the software has to pick the one it "sees" first and process it. You may see the little "busy" thingy while it does #1. If the delay is sufficient, that's when the bug hits.

My only "multiples" have occurred when I saw the "busy" thingy for too long.

HardToLove


On Aug 13 09:04 AM Freya wrote:

> What the heck. Hey Gmiki: take a look at the time of my first post
> and yours. What are the odds of that ever occurring again?
>
> Somehow, mine was repeated.

2009 Aug 13 04:06 PM

[Spartacuss]

Doesn't it occur to anyone that there is much more at stake here than the metals; they are nothing in the big picture. We are looking at a new paradigm or at least through a different looking glass.

Forget metals, forget money, we are looking at a whole new ball game. Trillions are being thrown around as if they were dice at casino, doesn't that provide for a little "heads up" here?

Right now the markets are exploding on the expectation of "don't fight the fed" as the new money will bring a cornacopia of free fortunes on those smart enought to take advantage of the FREE MONEY. What they don't get is exactly who is getting the free money? It isn't Joe Sixpac and his buddies. The man on the street is expendable when he isn't necessary. Power is everything, people are nothing except as slaves to some new order of things.

Wow, did I say that? What was I thinking. Sorry.

So, while we struggle for a 'what to do' it would seem that the metals are the only little puny life raft we have left. Pathetic isn't it?

I'll bet my stash of gold and silver is bigger than yours. Wanna bet?

So what? We have much bigger issues in front of us than surviving the monetarty storm.

2009 Aug 13 09:58 PM

[optionsgirl]

Here we are a few days later, and we got our answer. Dollar up, equities and commodities broadly down, silver fell from $15+- to under $14. I'd say that doesn't look good for silver, short term ( or anything else, for that matter). Long term is another story...

2009 Aug 17 01:05 PM