Contributed Commentaries
What does FED day mean for gold and silver?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Today is FED Day, or the day the clueless try to fix or cover up their many mistakes. The FED has done nothing in 109 years to benefit the average person and I suspect today will be no different.
The Federal Reserve is supposed to be a private corporation, but it has become another branch of the political parties.
At 2:00 ET today, they will announce their decision on interest rates. For the past year the FED has done a lot of lip service but has only delivered .25 hike in rates. As the announcement approaches, there are many opinions about what they will do.
There has been talk of .50 hikes with thoughts it could be .75. Last week's negative GDP could give the FED yet another excuse to hike only another .25. The street had priced in a .50. Any variance from there could create some fireworks. Then there is Chair Powell's speech and Q+A.
What does this mean for the precious metals? The answer is challenging but based on recent price action and the trend, the path of least resistance is lower. There could be a short squeeze rally, a continuation of the trend and a reversal. It is not an easy call because of too many variables. We are short going in and would sell more on a short squeeze. However, the best trade is to wait and react after the news.
Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper, knowing that we can trade either side without emotions.
In all markets, price action determines what will happen in the next day, week, or month. Keep the two strategies separate. The worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.
Patience, discipline, and money management always win the day. Let the map of the markets show you the way.
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