Traders and Investors await Fed and BOJ Policy Decisions on Wednesday
Equities are holding mildly higher as the Federal Open Market Committee’s meeting commences today. It is largely expected that the Fed will maintain rates as they are, but will perhaps add a sterner, more-hawkish statement concerning a rate hike come December’s meeting.
The U.S. dollar is up marginally against the euro and up about half a percent against the British pound. The greenback is lower against the yen as expectations for any significant dovish moves by the Bank of Japan fade.
Dollar strength dragged down gold prices but relatively strong bullish sentiment saw regular traders push the yellow metal up. The same held true for silver, but regular trading was even stronger than that for gold.
Oil prices initially edged lower today as concerns over a probable rise in U.S. crude stocks was reported. That added to worries about an already-bloated oversupply. However, that prospect outweighed rumors and comments from OPEC that a possible production freeze agreement could come sooner than was previously believed and could last longer than expected.
The CME FedWatch tool shows the probability for a rate hike tomorrow holding at 12 to 15%.
Volatility as measured by the VIX index declined as the Fed puts many markets into a bit of hibernation.
As might be expected, U.S. bond yields slipped, the 10-year moving below 1.70%. Conversely, face prices were up as is the rule.
Wishing you as always, good trading,
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Gold Forecast: Proper Action
This morning we sent out a Trade Alert:
Buy gold @ the market (1317 Current Dec Comex) (1314 spot)
Buy Silver @ market 19.30 (Comex) Place stop below 1878
Maintain both longs and both stops
Gold Market Forecast
Just as we have seen in many of the other major markets, precious metals traded in a tight range closing fractionally higher on the day.
Of course traders and investors are awaiting policy decisions which will be revealed tomorrow.
Based upon our current market analysis, as well as the fact that there is a 85% probability that no September rate hike will be forthcoming, we felt it was most prudent to recommend long positions in both gold and silver.
Today's video report will detail why that decision was made as well as go over the rationale behind our current stop placement's.