Another quiet day for the metals yesterday, with mild disappointment on the part of bulls, owing to the latest FOMC minutes which show that the US Federal Reserve is unlikely to resort to more quantitative easing unless the US economy weakens further. It is of course highly likely to weaken further, considering the recent slowing in money supply growth. But markets being what they are, the long-term takes a back seat to short-term considerations.
So precious metals remain under selling pressure while the dollar is moving higher. The Dollar Index gained 0.20% yesterday, finishing the day at 83.57. Over at King World News, Dan Norcini notes that on the USDX chart “there isn’t much overhead resistance once the dollar clears 84.” For the moment at least, as far as currencies are concerned, the old cliché about the greenback remaining the best looking horse in the glue factory still applies.
Readers may be interested in Erste Bank’s 6th annual In GOLD we TRUST report, sent to us by our friend Ronald-Peter Stoeferle. As he notes in the email intro to this report: “The foundation for new all-time-highs is in place. As far as sentiment is concerned, we definitely see no euphoria with respect to gold. Skepticism [sic], fear, and panic are never the final stop of a bull market. In the short run, seasonality seems to argue in favor of a continued sideways movement, but from August onwards gold should enter its seasonally best phase. USD 2,000 is our next 12M price target. We believe that the parabolic trend phase is still ahead of us, and that our long-term price target of USD 2,300/ounce could be on the conservative side.”
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FOMC Minutes Give No Joy
Published 07/12/2012, 08:31 AM
Updated 05/14/2017, 06:45 AM
FOMC Minutes Give No Joy
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