Technically speaking, gold needs to reach the $1600 – $1625 area to confirm the uptrend.
Better yet, once gold reaches the 200-DMA at $1,664, and silver at $30.70, they are going to blow to the upside.
They stay the course – they will continue to purchase $85 billion worth of Treasuries and mortgage-backed securities each month until unemployment hits 6.5%. Considering John Williams says the “real number” is over 23%, the Fed’s number is meaningless.
What else did you expect them to say? The only way to keep the economy from sinking is to continue to feed it with QE. Sinclair is right – it is QE to Infinity! The Fed’s only tool is “jawboning.”
The Chinese, Russians and Indians are NOT curtailing their gold purchases because of what the Fed “might do.” They buy gold for entirely different reasons. The Fed is merely accommodating the US government’s monster borrowing needs. They MUST continue to buy Treasuries because if left to the whim of the marketplace, interest rates would most definitely rise and that cannot be allowed to happen. Remember, every one percent rise in interest rates adds $160 billion in INTEREST PAYMENTS to the deficit and the National Debt. And, rising interest rates will harm the stock market and the real estate market and the result would be lower tax revenues. It’s a lose-lose situation. Do not fall for this nonsense. The Fed cannot cut back without disastrous side-affects.