This post was just published on ZYX Buy Change Alert
Our rating on gold and silver has been neutral with positive bias. Now gold and silver are being downgraded to neutral with no bias. Our models are driven by a large number of factors. There are two triggers for the downgrade. First, FOMC will announce its statement at 2:15 pm EDT. Expectations of bulls appear to be more optimistic than what the statement is likely to say.
Second, the ADP employment change came at 163k vs consensus of 125k. This is the first important positive data on the U.S. economy in recent weeks.
In addition to the Fed meeting, there is ECB meeting tomorrow and June employment data on Friday. Any one of these three events is capable of moving gold by as much as $80.
The point is the risk is too high.
We will be carefully watching all three events and if there is an opportunity to gain risk adjusted returns we will quickly post on the Real Time Feed.
