/Its Fed day! What will gold and silver do – Kitco News

Its Fed day! What will gold and silver do – Kitco News

The long-awaited Federal Reserve decision comes today at 2:00 EDT. Expectations have been all over the place from a rate cut of 50bps to 25bps. Last week it looked almost guaranteed that the cut would be 50 bps, but with the recent economic data the street has now priced in 25 bps.

Based on the recent economic data, there is a case for no cut, which could throw the street into a selling frenzy. We all know how the street hates to be disappointed and the temper tantrums they throw when they are.

There is only one case for a rate cut, which is to compete with world rates and reduce the borrowing costs of the United States. That is the case that President Trump has made daily. Negative rates around the globe give the Fed a perfect excuse to cut.

Now to answer the question of how this will affect the prices of gold and silver. Unless there is a major surprise the metals should stay the course, they are on now which is gold should hold the $1495-$1500 support and silver the $18.50 resistance level. In other words, we remain long gold and short silver until there is reason to change.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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