Although the FOMC minutes did not announce any QE3, Ben Bernanke has clearly not taken the option off the table. In a press conference after the FOMC statement, the Fed Chairman explained, “If appropriate and depending also on assessment of the costs and risks of additional policy actions, we remain entirely prepared to take additional balance sheet actions if necessary to achieve our objectives. So those tools remain very much on the table and we will not hesitate to use them, should the economy require that additional support.” The knee-jerk reaction seen in precious metals to the downside after the FOMC statement was overshadowed by Bernanke’s comments, as gold and silver both rebounded from intra-day lows.
In today’s headline and stimulus driven market, it is becoming increasingly important for investors to recognize certain events that can cause short-term volatility in precious metals. On Monday, we warned our premium subscribers that the FOMC meeting could cause a sell-off in gold and push silver down to $30 or even lower. Subscribers who heeded our warning received a lower entry-point into both precious metals and are in a better position to protect their portfolios from ongoing currency devaluations.
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Disclosure: Long EXK, AG, HL, PHYS
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