Blunt Fed tips gold see-saw higher


Gold was up today continuing the mercurial, see-saw performance that has dominated its price action over the past several weeks.  Finishing at $1292, gold was up $11.50 on the day and pretty much ended this shortened week (for all intents and purposes) where it started.  Silver was up 20¢ on the day finishing at $17.15, but down about 14¢ on the shortened week.

The minutes to the most recent Federal Reserve meeting reveal a governing committee genuinely concerned about the price levels in the stock market and the possibility for “a sharp reversal in asset prices [that] could have damaging effects on the economy.” Blunt as it is, that assessment is likely to stick in both peoples’ minds and the financial markets’ repertoire for weeks to come as we move to the end of 2017.  The gold market seems to have taken it as a caution on raising interest rates as well as a warning from on high.

Quote of the Day
“In a goldilocks scenario of low interest rates, abundant liquidity, stable growth and a focus on the ‘good’ Trump, investors continue to push asset prices, volatility and leverage to historical extremes. Yet, a low volatility carry environment with rather extreme positioning is a dangerous combination, which we recently likened to dancing on the rim of a volcano.” – Alain Bokobza, head of global asset allocation, Societe Generale

What is this important chart telling us about future Fed policy?
And what does it mean for the gold market?

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