Greetings!, You can say that the release of the FOMC minutes yesterday afternoon had a profound impact on the precious metals markets. Reports released today pointed to a weak U.S. economic scenario. This led to speculation that further quantitative easing - QE3 - might be implemented sooner rather than later. This of course would fuel inflationary concerns. But beyond the hints contained in the minutes, today's strong upside price move in the precious metals markets was a reaction, in fact, to a more traditional triple punch. First, short covering. Second, safe haven demand. And third, bargain-hunting all contributed to today's strong upside move. The European Union's current sovereign debt crisis remains in limbo and unresolved, thus remaining in the front of traders' minds. The European quagmire and the stalling U.S. economy collectively could be all the necessary kindling needed to ignite a precious metals rally. When you consider the decline in gold and silver prices not only over this last month but since we hit record highs in December of last year, I believe a strong rally is overdue. As always, wishing you good trading Executive Producer |
