Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
Stock Markets Around the World are Crashing. What Not to Worry About? - 12th Nov 18
Cyclical Commodities Continue to Weaken, Gold Moves in Relation - 12th Nov 18
Olympus Tough TG-5 Camera Stuck or Dead Pixels, Rubbish Video Auto Focus - 12th Nov 18
5 Things That Precede Gold Price Major Bottoms - 12th Nov 18
Big US Stocks Q3 Fundamentals - 12th Nov 18
How "Free Money" Helped Create Sizzling Housing Market & REIT Gains - 12th Nov 18
One Direction More Likely for Bitcoin Price - 12th Nov 18
The Place of HSE Software in Today's Business - 12th Nov 18
Gold Asks: Are US Bonds Overvalued? - 11th Nov 18
Why the Stock Market Will Pullback Before Heading Higher - 11th Nov 18
GDX - Will you Buy This Hated Stock with Me? - 11th Nov 18
Christmas and Halloween LED Dynamic Projector Light Review - 11th Nov 18
Wall Street Veteran: Why I Don’t Lend to Family and Friends - 10th Nov 18
Stocks Breaking Higher, but Resistance Ahead - 10th Nov 18
Stock Market Was Supposed to “Crash Like 1987” - 10th Nov 18
SPX : The Incredibull Stock Market Plays On - 9th Nov 18
USD/CAD – The Moment of Truth Is Coming - 9th Nov 18
Is the Stock Market’s Rally “All Good To Go”? - 8th Nov 18
End in Sight for 'Unloved' Silver - 8th Nov 18
Outlook for Gold & Silver Precious Metals Sector is 'Positive' - 8th Nov 18
A Great Day for Metals as Platinum Price Breaks Out - 8th Nov 18
Future US Interest Rates, Financial Markets, and the FED - 8th Nov 18
Buying an Approved Used Land Rover From a Dealer - What You Need to Know! - 8th Nov 18
USD’s Weekly Breakout and the Gold Golden Spring - 7th Nov 18
Stocks Made a Post-crash Bounce. What’s Next? - 7th Nov 18
The Fourth Turning & War Of The Worlds - 7th Nov 18
The Economic Costs of Corruption in Philippines - 7th Nov 18
Stock Market Counter-trend Rally - 7th Nov 18
Britain's Unreliable Railways - Transpennine Express to Manchester Airport - 7th Nov 18
US Midterm Elections Forecast 2018 - 6th Nov 18
Stock Market’s Short term Outlook is Slightly Bearish, But Medium term is Bullish - 6th Nov 18
Financial Markets Are Making Faulty Assumptions about Growth & Resources - 6th Nov 18
Trump's War on the Fed - 6th Nov 18
Positive Implications for Gold Miners if Crude Oil Breaks Down - 6th Nov 18
Top Tips for Buying an Approved Used Land Rover from a Main Dealer - 6th Nov 18
What Every Investor Can Learn from Gamblers - 6th Nov 18
Is the Gold Bull Back? - 5th Nov 18
Gold Stocks Winter Rally - 5th Nov 18
The Cycle Saving Home Buyers $3,000 Per Year Just Ran Out Of Fuel - 5th Nov 18
Gold Stocks are Not Close to Bottom - 5th Nov 18
Stock Market Sharp Corrections and Bounces are Usually Followed by Retests - 5th Nov 18
London Dungeon Merlin Attraction Tourist Review - 5th Nov 18
Everything You Need to Know About Medicare in the United States - 5th Nov 18
Banking Stocks Index Signals Bank Failures - 4th Nov 18
IKEALand - New Theme Park Opens in Sheffield! - 4th Nov 18
London Eye Giant Ferris Wheel Ride Review - Top UK Tourist Attractions 2018 - 4th Nov 18
5 Major Factors Affecting the Direction of EUR/USD - 4th Nov 18

Market Oracle FREE Newsletter

Trading Any Market

FED Leaves US Interest Rates Unchanged, Gold and Silver Bounce

Commodities / Gold and Silver 2016 Jun 16, 2016 - 06:56 AM GMT

By: Jason_Hamlin

Commodities

Gold and silver both erased morning declines and pushed higher today after FED chair Janet Yellen announced they would leave interest rates unchanged. Policy makers gave a mixed picture of the U.S. economy, citing growth in some sectors but slowing job gains. While the median forecast of 17 policy makers remained at two quarter-point hikes this year, the number of officials who see just one move rose to six from one in the previous forecasting round in March. The market now sees less than a 50 percent chance of even one rise by year-end. I also expect a maximum of one rate hike this year from the Fed Chair Who Keeps Yellen’ Wolf.


If you have been folloing our forecasts, we have never been convinced that the FED would be able to raise rates as aggressively as they had been forecasting. Global markets are simply not strong enough to handle any significant hike in rates at this juncture. We have been buying the dips in precious metals every time that Yellen hinted at raising rates. We will continue to call her bluff and snap up discounted mining shares whenever weak hands panic.

Gold advanced by $8 (0.6%) to $1,294 and silver by $0.16 (0.9%) to $17.50 today. These are somewhat muted advances, but then again nobody really expected the FED to raise rates today (odds were just 2%).  They may have to eventually increase rates by 25 basis point in an attempt to save face and convince investors that the economy is healthy. But we believe the FED will be backtracking, looking to lower rates and increase stimulus at some point in the next 12 months as markets roll over and correct sharply.

Mining stocks continued offering strong leverage to the underlying move of the metals, with the Gold Miners ETF up 3.75% today. That is daily leverage of more than 6X the advance in gold and 4X the advance in silver. Year to date mining stocks have offered leverage of 4X the advance in gold and 3.5X the advance in silver. This type of leverage is more pronounced during the early phases of bull market advances. We have been positioned to take advantage of this trend and our subscribers have been generating significant gains in 2016.

FED Concerned About Potential Brexit

It was interesting that Yellen mentioned the Brexit vote today. She said that uncertainty ahead of the U.K. referendum, which will decide whether or not to leave the European Union, impacted the central bank’s monetary policy decision. The Brexit vote was discussed during the meeting and was a factor among committee participants.

“It is a decision that could have an impact on global economic and financial conditions,” she said. “It is certainly one of the uncertainties…”

Despite the widening lead for a Brexit in the polls, I think the UK is not likely to be allowed to leave the EU. The vote will be rigged, as they are so often, so watch for the ‘remain’ vote to win by 51%. Like Stalin said:

“It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything”.

Therefore, we can probably expect a pullback in gold and silver prices after Brexit fails on June 23rd. Gold still needs to break through key technical resistance at $1,306. We will likely wait for the UK referendum before adding any new positions to the GSB portfolio. I think it will provide an excellent opportunity to add to current positions, whether there is a dip on a ‘remain’ vote or a major breakout on a ‘leave’ vote. Either way, we expect much higher gold and silver prices by year end.

If you would like to view our top gold and silver stock picks, plus get trade alerts whenever we are buying or selling, and the monthly contrarian newsletter, click here sign up now for less than $1 per day!

By Jason Hamlin

http://www.goldstockbull.com/

Jason Hamlin is the founder of Gold Stock Bull and publishes a monthly contrarian newsletter that contains in-depth research into the markets with a focus on finding undervalued gold and silver mining companies. The Premium Membership includes the newsletter, real-time access to the model portfolio and email trade alerts whenever Jason is buying or selling. Click here for instant access!

Copyright © 2016 Gold Stock Bull - All Rights Reserved

All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. The information on this site has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any information on this site without obtaining specific advice from their financial advisor. Past performance is no guarantee of future results.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules