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Just When You Thought It Was Safe

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Let the hair pulling commence.

Gold seemed to rise and fall as if on big rolling seas today. After regular-hours trading, it appeared that gold would end more or less unchanged.

That was not to be. As the late afternoon session wore on, gold took a significant, though not catastrophic drive that was partially, though not wholly, exacerbated by dollar strength.

What suddenly sprang into the picture is paranoia over next week's FOMC meeting (the 16th and 17th). Why all of a sudden?

The San Francisco Fed released an in-depth study articulating how investors underestimated the speed at which the Fed might raise rates. Whether this is accurate seemed to not occur to anyone. Each federal Reserve branch is "independent," and has its own team that assesses conditions regionally and nationally.

Although the study was issued yesterday, it seems not to have been fully digested until after noontime EDT. This is just what the precious market needed to start chasing its tail over possible Fed rate rises.

Apparently the same analysts and investors ignored the fact that mortgage applications hit a fourteen-year low in August. Yes - that's one-four fourteen. XIV if you remember your Roman numerals.

And, while the situation in Ukraine has cooled off considerably, tonight President Obama is going on air to tell of the impending war with the desert barbarians. Nevertheless, gold and silver did not bat an eyelash at the news of another Middle East adventure.

The price of energy plummeted again today, although natural gas held firmer than crude and Brent. The latter two were down around 1.00%. Our sense is that this is more than a glut. It's a sign that consumption is down worldwide.

None of this stopped American equities markets, which continued their juggernaut ways. The NASDAQ was up 0.75% while the S&P and Dow were up about a third of a percentage point each.

Gold and silver have been looking for direction. It seems that direction is upon us.

As always, wishing you good trading,

Gary S. Wagner - Executive Producer