Dillon Gage is proud to offer the following insights into the precious metals market from Roy Friedman. Roy has over 3o years of in-depth experience in all facets of precious metals. We will offer Roy’s comments several times each week.
Trading yesterday was highlighted by light volume with short covering from speculators being the driving force in gold moving higher, while the rest of the complex traded near unchanged. Early morning trading today finds gold trading in a narrow range and oscillating between a 2 dollar gain and loss, while the rest of the complex is hanging on to small gains.
Today has the potential to be very volatile and could set the stage for metals finally moving into a new trading range. The Fed decision on interest rates will be released at 12:30 EST, this will be followed with a 2:00 PM press release on the Fed’s economic forecast and finally at 2:15, Chairman Bernanke will testify before Congress. While interest rates are not expected to change in the short term and the Fed has continued to pledge rates will stay near historic lows into 2014, an upbeat economic report and testimony this afternoon could spark fears of rate hikes coming sooner than expected and the policy change would certainly cause the USD to rally and pressure metals. On the other hand, a weak assessment of current and future economic trends will bring QE3 back into play, which will pressure the USD and certainly cause metals to rally. Today is also option expiration on the Comex, with very large positions in the $1,650.00 puts and especially calls. As expiration occurs around the same time we begin getting news from the Fed it will only add to the potential for a significant move in gold this afternoon.
Roy Friedman has a degree in economics and political science from the State University of New York at Binghamton. For more than 30 years, he has worked at all levels of he industry including as a trader for major Metals firms and international banks. For more information on Mr. Friedman, please click here.