Skip to main content

In Neutral

Video section is only available for
PREMIUM MEMBERS

The decision to taper the pace of asset buying will come when economic indicators say that the economy is clearly gaining momentum. Although the FOMC minutes did not suggest when that juncture would be reached, precious metals markets seemed to think it will come soon. 
 
The meat of the minutes said:
 
"During this general discussion of policy strategy and tactics, participants reviewed issues specific to the Committee's asset purchase program. They generally expected that the data would prove consistent with the Committee's outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months."
 
"We take these minutes as meaning March is the most likely scenario for tapering. There's no overwhelming case to be made for them to act in December," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York. 
 
In related economic news, the U.S. Commerce Department reported earlier that retail sales expanded 0.4% in October, blowing the doors off expectations for a 0.1% gain after coming in flat the month earlier. This is in spite of October's government shutdown, which seems to have had little or no effect on the economy unless those workers who were furloughed were spending all their time shopping. 
 
There is worse news for gold. 
 
New data showed U.S. consumer prices last month rose at the slowest pace in four years, the latest in a chain of reports that inflation remains low.
 
"With inflation well contained, who needs gold?" said Rich Ilczyszyn, senior market strategist with brokerage iiTrader. Indeed.
 
The dollar was down against the three other major developed-world currencies. Bond yields, as could be expected, were up, given that a slowdown in QE3 would likely push interest rates higher. The three U.S. equities indexes were down, while results were mixed in Europe and Asia.
 
If mere talk of tapering moves indexes around this way, what might happen when it finally does occur? It seems there is a pat answer. But... what if we get a kinder, gentler tapering? From $85 billion to $75 billion per month, for instance. "Tapering" and "ceasing" have two very different meanings and sets of ramifications.
 
Wishing you as always, good trading,

   

Gary S. Wagner- Executive Producer

 

Market Forecast:

chart.jpg

Over the last two days we have been suggesting that you enter short positions in gold and silver.
All Traders should be short, those who were not were given a last chance this morning when we put out another sell recommendation. We are still looking for lower prices

Proper Action

Maintain Gold Short at 1276  stop @ 1294
Maintain Short silver @ 20.47 stop @ 20.90

USCFTC_banner.jpg

COT LINK  See previous weeks in Historical Commitments of Traders Reports.

 

Click on bull below for current chart gallery

 

Gary S. Wagner - Executive Producer