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Fed Does Little To Help The Metals

Commentaries & Views

On Wednesday, Fed officials concluded their two-day meeting on interest rates and as is their way, they did nothing, focusing on the equity market as the only asset class that matters. They should have raised rates, but with their fear of the bubble they built, they remained mute.

Gold ended with a loss Wednesday, making a new two-month low. Gold and silver have rallied overnight. Silver held the key level of support at $16.20, while gold is flirting with the key level of $1,310. If $1,310 fails to hold, gold is headed to $1,280; like a great horse race, gold could go either way from here.

The biggest problem for gold is each rally attempt is weaker than the one before. Gold could hold here but the most likely scenario is gold breaks down to $1,280, while silver holds or rallies, narrowing the gold/silver ratio that is now at 79-1.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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