Gold Pushed Above $1,310 By US Fed Statement

The US Fed announced today, through the FOMC statements, that rate hikes should not be expected as fast as some market participants are expecting it. That was enough food to cause the markets to change directions. Stocks levitated higher. Similarly, gold and bonds were pumped, while the US dollar was dumped on the prospects on longer low interest rates in the US.

This is what Dan Norcini, professional trader, had to say about today’s market reactions:

Watching the US Fed swing from hawkish to dovish in such a short interval makes me understand why our markets are so screwed up. The Fed is consistently changing their assessment of things. That would be just fine and dandy were not the US financial markets addicted to easy money and so utterly dependent on these jokers for their latest fix.

I maintain that our entire financial market system is no longer functional in the sense of reflecting anything resembling reality. The more I see what we got from these soothsayers at the FOMC, the more despairing I become. Is this what was once the finest example of free market capitalism has become in our degenerate age? The entire marketplace sits around with bated breath waiting, as if some sort of buzzards circling a dying animal, for the pontifications of a group of men and women whom put their underwear on just like the rest of us. Depending on their mood of the month, the markets respond dutifully.

The big thing today from the FOMC, in my opinion, was this lack of inflation concern and the fact that the Fed, no matter how much they would love to see it, cannot generate anything anywhere near their target of 2%.

Gold rose significantly. The 5-minute chart shows the push at the FOMC announcement, at 2PM.

gold_price_9_April_2014

From Dan Norcini:

Gold seemed caught in a tug of war between those who believe the near zero interest rate environment, that now certainly seems to be prolonged longer than many expected last month, and those who are keying on this lack of inflation.  The Dollar weakness generated a move into the plus column for the metal but gains were relatively muted as without any sort of serious inflation concerns, the metal run out of guys willing to chase it too much higher, especially with the mining shares relatively comatose compared to the rest of the torrid gains across the equity sector.

The Yen actually moved lower against the Dollar as no one seemed to need any safe haven with the spiked punch bowl hanging around longer than guesstimated.

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