The gold market flashed higher yesterday on the Fed statement release with a 30 minute low to high rally of $15! Subsequently gold has added another six dollars per ounce with a peek above the $1325 level.
The Fed's announcement indicating there would probably not be another rate hike in 2019 spurred buying interest throughout the metals complex. Clearly the Fed was "more dovish" than market expectations, as a number of strong market reactions followed the Fed statement and press conference.
One might even suggest the gold market is facing a very favorable economic condition with the Fed on the sidelines and apparently suggesting the US economy is in good shape. Surprisingly gold and silver are forging gains in the face of a recovery rally in the dollar perhaps because the trade views the $ bounce this morning as a temporary technical action resulting from the big washout yesterday.
Ultimately we think the massive range down failure in the dollar from yesterday projects a return to the late February lows, and therefore a commensurate upside extension in gold might be expected toward the next pivot point up at $1,351.90. In fact, given the wide range downside rejection and recovery on the charts yesterday one could suggest that short-term technical conditions in gold were balanced and a possible run toward $1,350 is now possible.
Apparently the gold market is unconcerned of a several ton sale of Venezuelan gold which was apparently collateral for a loan.
Clearly the silver market has also caught a lift from gold and the Fed yesterday and we now see silver prices in the May contract settling in above $15.50 and climbing toward the $16.00 level. Others are noting the flash in May silver above its 200 day moving average again this morning as a possible long-term shift up in the trend. Traders are also noting extremely low silver options volatility/premium levels and clearly silver is finally waking up to the strength in gold, platinum and palladium!
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