Good Afternoon,
FOMC decided at this meeting to continue tapering their bond buying by $10 billion for a 5th
straight meeting to $35 billion and on pace to end the program this
year. The bond purchase will be $20 billion in treasuries and $15
billion in mortgage back securities. Fed left interest rate near zero
and cut its GDP outlook from between 2.8%-3% down to 2.1%-2.3%. Fed
chair Yellen reiterated that the pace of tapering will depend on future
economic and employment data and not set at the
$10 billion. The Fed said inflation continues to be lower than the 2%
target rate. There is nothing new in the FOMC decision or the Q&A
afterwards so the market reaction is muted with gold and silver up
slightly and platinum and palladium up on noise coming
out of South Africa that the Union leadership are putting in additional
demands than what was agreed in the settlement framework. We would
maintain our long position in gold and silver and look to sell half the
position at around $1290 and $20.05 and sell
the other half above $1300 and $20.25 respectively. We would be
cautious of platinum and palladium as any more negative news regarding
the settlement framework will cause the price to spike in the near term
while long term outlook remains bearish, as investors
and funds look to liquidate their long positions will cause the prices
to fall sharply. Sit back, relax, and watch the stocks move higher would
be the conventional wisdom. Have a wonderful evening.
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