This post was just published on ZYX Buy Change Alert
Gold and silver have been running up on anticipation of the Fed easing and stimulus from the ECB.
The strong GDP number released at 8:30 am EDT makes it difficult for the Fed to ease at this point. Q2 advance GDP came at 1.5% vs 1.2% consensus. Q1 GDP was revised up to 2.0% from 1.9%. These numbers show that American economy is stronger than generally believed.
Today is Friday and bulls are hoping that ECB will make some kind of announcement before our markets open Monday morning. This optimism is providing some strength to gold and silver.
Astute investors should be extremely cautious as the strength can easily reverse if on Monday there is no announcement from the ECB.
No buying is seen by Smart Money during this run up. Over the last few months, Smart Money has been selling gold and silver on run ups. Interestingly, this time no selling by Smart Money is being seen either. One possible explanation is that Smart Money is interested in generating high risk adjusted returns. Even though there is a strong potential for an up move here, the risk is high. This is why Smart Money may be content sitting on the sidelines.
