Did You Hold Onto Your Money Today?

January 28, 2015 - 4:32pm

 by Gary Wagner

While waiting for the Fed to speak, it seems almost all sectors of the marketplace were holding their collective breath. The U.S. dollar stayed extremely strong, except against the yen, which seems to have escaped gravity’s pull.

All of gold’s loss today is attributable to dollar strength.

The Fed did speak – tersely – but it held great meaning. It maintained its pledge to be “patient,” and said “Economic activity has been expanding at a solid pace. “Labor market conditions have improved further, with strong job gains and a lower unemployment rate.” The FOMC statement also said inflation “is anticipated to decline further in the near term,” while also stating that price gains are likely to “rise gradually toward 2 percent over the medium term as transitory effects of low energy prices dissipate.

It is this confrontation of two distinct trends that seems to be troubling all markets. Higher employment usually leads to higher wages, which in turn leads to higher prices in consumer and other goods.

The FOMC also tipped its hat to “international developments,” (meaning economic energy). That is shorthand for, “we’ll see what effect quantitative easing has in Europe, and how China and Japan do.”

The Fed also dropped its pledge to keep rates low “for a considerable time,” a telling deletion.

The net effect? All three American exchanges are down around 1%. The 10-year yield on U.S. bonds fell. And oil…

Crude was down 4.25%. How low can it go before they start giving it away? West Texas Intermediate is down to its lowest since June of 2009, a period that represented the teeth of the Great Recession. However – it has probed this level before and bounced back up. Mid-to-long-term prospects are good, and there are reports that the price of gasoline has bottomed and will go up, even if moderately.

The greenback was up against the euro and GB pound, but slightly off against the yen.  

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

Gold Forecast: Proper Action

We are currently flat with no open positions in either gold or silver

Stop hit and profit taken in long position in gold. In @ 1217.50. out  @ $1272 ($ 54.50 per oz. or $ 5450.00 per contract)

Stop hit and profit taken in long position in silver. In @ 16.54 out @ $17.54 ($1.00 per oz or $5000.00 per contract)

Gold Market Forecast

It is never a dull Wednesday when the Federal Reserve speaks. Today was no exception. Trading activity moved the equities markets lower, crude oil lower, precious metals lower and the U.S dollar higher. Although much can be made on a fundamental basis for comments and statements made by the Fed today, on a technical basis we make the following observation: we expect to see continued short-term pressure in the precious metals markets.

We have updated our trading portfolio and marked ourselves out of our last long position in gold. Even though we were stopped out roughly $12 lower than current market price we were able to pull a substantial profit out of the market. Our first trade in gold netted us well over 100% return based upon the current margin of $4000 per hundred ounce contract of gold. As we are currently flat with no open positions, today’s show will detail our current strategy.

We will outline specific parameters necessary for us to initiate either long or short positions in gold and silver.