Fed Held The Line The Fed ended QE and left the language unchanged. The result: a stronger U.S. dollar and heavy selling of the metals. Almost a slam dunk trade. Gold will now need to hold the $1,202 level, or a test of the triple bottom will be imminent and I suspect, if tested again, will not hold. The saving grace for gold may be capitulated selling, if it occurs, in the equity space as traders perceive the higher rate event. But, call me stubborn, the Fed, in my opinion, will not raise rates and although QE may be officially over, accommodative monetary policy will be with us for a longish time. This market will now develop a choppiness, as good economic news will create selling in the metals and poor stats will generate buying, as the yin/yang of whether the Fed moves sooner rather than later will be a theme over the next few months. Difficult if you’re a trader, but for longer term horizons, this excess of capital creation by global central banks will end badly, with the most likely result being an inflationary spike, aka the 1970’s. Watch gold then. By Peter Hug Global Trading Director Kitco Metals Inc. #Kitco | Commentary: hubs.ly/y0fYsM0
Posted on: Thu, 30 Oct 2014 13:31:16 +0000
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