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Easy Fed Gives Gold Rocket Fuel
kitco.com ^ | June 20, 2019 | Jim Wyckoff

Posted on 06/20/2019 6:04:23 AM PDT by Migraine

(Kitco News) - Gold and silver prices are sharply higher in early morning U.S. trading Thursday. Gold powered to a five-year high, while silver prices hit a five-week high. Major central banks that are leaning easy on their monetary policies are boosting the metals and the raw commodity sector, in general. Gold is also seeing increased safe-haven buying interest as tensions in the Persian Gulf are on the rise. August gold futures were last up $37.50 an ounce at 1,386.50. July Comex silver prices were last up $0.417 at $15.385 an ounce.

Traders and investors are still digesting Wednesday’s conclusion of the Federal Open Market Committee (FOMC) meeting that saw no change in U.S. interest rates, but the Fed did lean significantly more dovish. The FOMC statement said the committee would lower interest rates in the coming months if U.S. economic growth begins to slow down. The FOMC expects the U.S. economic expansion to continue but “uncertainties about this outlook have increased,” the statement said. About half of the FOMC members now expect the Fed to make at least one interest rate reduction this year. The FOMC statement also eliminated the word “patient” from its monetary policy stance.

Markets are continuing to react to the dovish Fed meeting and also to European Central Bank President Mario Draghi’s easy stance on monetary policy in comments he made earlier this week. The U.S. dollar index has sold off, the Euro currency has rallied, crude oil prices have surged and U.S. stock indexes have pushed higher and within easy striking distance of their record highs. European and Asian stock indexes were also mostly higher overnight.

The Bank of England and Bank of Japan also hold their regular monetary policy meetings yet this week.

Gold is also seeing safe-haven demand today on reports Iran’s military shot down a U.S. military drone in Iranian territory. Also, a missile struck a Saudi Arabian water plant, and Iran is being blamed. The U.S.-Iran stare-down just got ratcheted up another notch. President Trump is now likely closer than ever to unleashing some degree of a military operation against Iran. It’s a good bet this situation will get worse before it gets better.

The key “outside markets” today see Nymex crude oil prices solidly higher and trading just above $55.00 a barrel. Meantime, the U.S. dollar index is lower on good follow-through selling from solid losses posted Wednesday afternoon in the wake of the dovish FOMC statement.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, leading economic indicators and international transactions (current account).

Technically, the gold bulls have the solid overall near-term technical advantage and gained more power today. Prices are in a seven-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in August futures above solid resistance at $1,400.00. Bears' next near-term downside price breakout objective is pushing August futures prices below solid technical support at $1,361.50. First resistance is seen at $1,390.00 and then at today’s high of $1,397.70. First support is seen at $1,375.00 and then at $1,370.00. Wyckoff's Market Rating: 8.5

July silver futures bulls now have the overall near-term technical advantage. Prices are in a three-week-old uptrend on the daily bar chart. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.625. First resistance is seen at the overnight high of $15.40 and then at $15.50. Next support is seen at $15.25 and then at the overnight low of $15.12. Wyckoff's Market Rating: 6.0.


TOPICS: Breaking News; Business/Economy; News/Current Events
KEYWORDS: fed; fedrate; gold; goldprice; preciousmetals; sotckmarket
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To: i_robot73

Wont happen.

What will happen is what happened in Germany just after WWI.


41 posted on 06/20/2019 5:21:13 PM PDT by crz
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To: Migraine

My investor said gold will go up. He has a computer that tells him this, and his computer is usually correct.

An ounce of gold today is an ounce of gold last year, and next year. Like holding a rock or a pile of wood. Just easier to move around.

Trust in government is what changes, day to day. We know Trump will be gone in five years, at the least. We have a socialist crew of communists, with lead communists calling for a wealth tax, reparations, universal health benefits for the people of planet earth.

The day after Elizabeth Warren is elected and Corey Booker is her VP, gold will command twice as many dollars. That day may be closer than we think. We will have a different kind of trust on that day. A trust that we are the target of our government, and that we must lose our wealth to satisfy them. Much like chickens in a pen, a few hours before dinner.


42 posted on 06/22/2019 3:06:04 AM PDT by PA-RIVER
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To: PA-RIVER

You are on it my friend. It isn’t about yield curves or Fed funds rates. It is about confidence in the value of the fake currencies which are presently believed. Once that confidence weakens and belief is suspended, the collapse will be almost instantaneous.

Gold (and other tangible and defensible assets) then becomes the sole repository of wealth. Gold happens to be the most compact of all the liquid assets.


43 posted on 06/22/2019 9:02:45 AM PDT by Migraine
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To: Migraine

Yes but oil not confirming at the dirt cheap price of 55.00


44 posted on 06/22/2019 9:29:44 PM PDT by Sam Gamgee
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To: Labyrinthos

“investing in physical gold is a fools game.....gold does not have intrinsic value...”

Does physical gold have less intrinsic value than fiat currency?


45 posted on 06/24/2019 8:16:05 AM PDT by enumerated
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To: Labyrinthos

If you think the USD will never collapse then don’t buy gold. If it ever does collapse I will make you dance like a little poodle in a tutu for a bit of my gold.


46 posted on 06/24/2019 8:27:11 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: central_va

But what are you going to do with that gold? Buy milk? Gas? I walk into my local mini-mart, for example, and buy milk, eggs, and coffee, and want to pay with a .10 oz American Eagle Gold Coin, currently worth $160.65. How am I going to convince the cashier, who is probably some pimply-faced high school dropout, to accept the coin? How is the cashier going to make change? And how is she going to know how much change to make since the price of gold can change minute to minute?


47 posted on 06/24/2019 8:44:48 AM PDT by Labyrinthos
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To: Labyrinthos

If the dollar collapses we will be in barter mode. Like I said if you think the USD will never collapse then don’t worry about it. If the USD collapses and people still take paper money it will be like Venezuela an OZ of gold will by a wheel barrel full of money. You will own the world. The only reason that gold is stuck now at a fixed price because it is being manipulated.


48 posted on 06/24/2019 10:48:10 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: central_va
Once the other nations dump the petro-$, and they will, those holding gold are going to be sitting pretty. There’s a reason Russia and China are hoarding gold. There’s a reason we do whatever Saudi says. The two are connected: the petro-$. Reality is going to slap people in the face really hard one day. Soon? Who knows. All I know is a “roaring economy” should be able to handle interest rates above 2.5% and a president that presided over such an economy should be screaming for cuts. Markets shouldn’t rise and fall on the rumor of a cut. Gold shouldn’t skyrocket the same time the market does because people know cuts are coming.

I trade gold, oil and Nasdaq futures (primarily-and some Ag futures too) for a living. It beats anything I’ve ever seen. The whole world is full of ugly women right now. The US$ is just the least ugly in the room at this moment. But-its hideous.

49 posted on 06/24/2019 11:40:04 AM PDT by NELSON111 (Congress: The Ralph Wolf and Sam Sheepdog show. Theater for sheep. My politics determines my "hero")
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