Slide Continues

While certainly analysts are interpreting the latest FOMC statements as being strongly hawkish, today, other factors took over. The stock market soared - a large portion of the rise was due to one stock, though - Visa. The dollar was down, though not significantly, but oil was holding hands with gold on their dual price slide.

Oil is dangerously near breaching the $80 per barrel floor, a barrier that, if broken could lead the way down to $75 or even $70. Many in the industry are trying to talk the price back up, citing smaller inventories, but the reality is that the biggest inventory is in the ground and it can be reached, pumped, refined and delivered now.

U.S. GDP growth was 3.5% in the third quarter, higher than expected. The U.S. trade deficit also narrowed, another cause for optimism in the world's biggest economy.

The shadow of Europe's slowness and China's less-than-vigorous growth cast a shadow on the foot-stompin' party, nevertheless.

More pertinent to gold, the likelihood of an interest rate rise by next September, which had been hovering just above 40% as we have reported, shot up to over 50% on the FOMC news and comments yesterday. (Even earlier this month, the bets were on a rise in October.)

But, we should keep in mind that there is a long prairie to cross before we reach autumn of next year and we should also remember that the first quarter of this year saw the American economy actually shrink. With all the quarters averaged in for 2014, the U.S. economy has still only expanded by 2.4%.

Gold, of course, does not bear interest and so it should like ultra-low rates, although it has seen its struggles this year. Additionally, if and when rates rise in the U.S., don't expect them to go soaring, but rather expect them to be ratcheted up notch by notch so the economy doesn't sink like a stone.

Another fly in the ointment for higher gold prices is higher "real" interest rates. Banks tend to get out ahead of Fed rate rises. Everything from mortgages to auto loans, business loans to student loans could go up sooner rather than later/ The upside is that with higher real rates, credit will loosen, which might help keep the economy perking.

"The feeling was that given the turmoil markets had seen earlier in the month, maybe the Fed might have been a little more dovish," Michael Lewis, head of commodity research at Deutsche Bank said. "But what the Fed said was that it hadn't changed its outlook."

"Our sense is that there are still obviously more adjustments still to come in terms of rates, dollar, and equity risk premium," he added. "The adjustment is higher in terms of real rates, and the dollar, and we do feel that gold will be breaking those lows."

Here is news from Switzerland to keep and eye on.

Wishing you as always, good trading,