Greetings! 

What a day for the precious metals! In a statement made after the FOMC meeting, Federal Reserve Chairman Ben Bernake suggested that the nation's current monetary policy would remain the same. He also suggested that this policy could continue through 2014.  

Quantitative easing will continue to keep the U.S. Treasury printing presses quite active as they flood the market with more U.S. dollars. This action will of course weaken the U.S. dollar. That, along with incredibly low interest rates, will continue to fuel this bullish rally in gold, which began at the end of last year. 

When I was preparing today's report, gold was trading at $1700 and silver was just breaking $33 an ounce. That was roughly 1-1/2 hours ago and silver has climbed to 33.25 and gold has continued its rally now at approximately 1710 per ounce. Gold's first rally of 2012 is now becoming a major milestone. 

From 1530 to 1710 dollars per ounce, we have witnessed a month-long price ascent that has seen the precious yellow metal gain almost $200. I still believe the best is yet to come, but this is certainly a great beginning to what I believe will be a landmark year in the precious metals markets.

As always wishing you good trading,

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Proper Action

GOLD: Maintain Long @1580. My long-standing target of 1686 basis was taken out today as the Federal Reserve pledged to continue printing money and weakening the U.S. dollar. On a technical basis, our next real level of resistance really does not come until 1750 per ounce. Aggressive traders can look to add their third leg and add to the long gold position on dips or breakouts in the market. Your stop should be sitting below 1650, and for the time being I recommend just leaving it there.

SILVER: Maintain Long @ 28.10. Our initial target was hit the other day as silver traded past 31.86. Currently silver has broken above $33 per ounce and we have in essence a $5 profit on the trade. However, I believe there is still more on the table as you already know my hard resistance level is at about $35 per ounce.  

MARKET FORECAST

Gary S. Wagner

GOLD & SILVER:

My market forecast yesterday said "With a Federal Reserve meeting concluding tomorrow, we could be in for some wild swings in both gold and silver." Nothing could have been closer to the truth. We witnessed an intense, substantial breakout to the upside, essentially cutting through any technical resistance that gold had, like the proverbial hot knife through butter.

On a technical basis gold is still firmly embedded in wave 1. This is our intermediate count, which is but one of five waves that will comprise a major fifth wave that gold is currently in. Look for silver to follow in the steps of its big brother. But once again, as in last year, look for silver to outperform gold on a percentage basis as this market continues this landmark rally.

Copyright (c) 2011 Wagner Financial Group