Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17
Q4 Pivot View for Stocks and Gold - 14th Oct 17
Gold Mining Stocks Q3’17 Preview - 14th Oct 17
U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold - 14th Oct 17
Yuan and Gold - 14th Oct 17
Tips for Avoiding a Debt Meltdown - 14th Oct 17
Bitcoin Hits New All-Time High Above $5,000 As Lagarde Concedes Defeat and Jamie Demon Shuts Up - 13th Oct 17
Golden Age for GOLD, Dark Age for the Stock Market - 13th Oct 17
The Struggle for Bolivia Is About to Begin - 13th Oct 17
3 Reasons to Take Your Invoicing Process Mobile - 13th Oct 17
What Happens When Amey Fells All of a Streets Trees (Sheffield Tree Fellings) - Video - 13th Oct 17
Stock Market Charts Show Smart Money And Dumb Money Are Moving In Opposite Directions—Here’s Why - 12th Oct 17
Your Pension Is a Lie: There’s $210 Trillion of Liabilities Our Government Can’t Fulfill - 12th Oct 17
Two Highly Recommended Books from Bob Prechter - 12th Oct 17
Turning Point Nations On The Stage - 11th Oct 17
The Profoundly Personal Impact Of The National Debt On Our Retirements - 11th Oct 17
Gold and Silver Report – Several Interesting Charts - 10th Oct 17
London House Prices Are Falling – Time to Buckle Up - 10th Oct 17
The S&P Is A Bloated Corpse - 10th Oct 17
Are Gold and the US Dollar Rallying Together? - 10th Oct 17
Is Silver Turning? - 9th Oct 17
Bitcoin Needs Electricity, Gold CONDUCTS Electricity - 9th Oct 17
S&P 500 At Record High But Will Stocks Continue Even Higher? - 9th Oct 17
Gold and Silver on Major Buy Signal, The Cycle is Up - 9th Oct 17
How To Fight Corruption in the Philippines - 9th Oct 17
Stock Market Bulls Still in Charge - 9th Oct 17
DiEM25: Europe Without Nations or Religion - 9th Oct 17
Gold Price Readying to Rally - 8th Oct 17
Gold Price in Q3 2017 - 8th Oct 17
PassMark Bench Mark of OVERCLOCKERS UK Custom Built Gaming PC (5) - 8th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

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.


© 2005-2017 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

Catching a Falling Financial Knife