Yesterday at about 3:45 pm EDT, WSJ published a leak from the Federal Reserve. Such leaks are usually deliberate on the part of the Federal Reserve. Here is an excerpt from WSJ of the leak:
Federal Reserve officials, impatient with the economy’s sluggish growth and high unemployment, are moving closer to taking new steps to spur activity and hiring.
Since their June policy meeting, officials have made clear—in interviews, speeches and testimony to Congress—that they find the current state of the economy unacceptable. Many officials appear increasingly inclined to move unless they see evidence soon that activity is picking up on its own.
Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move
Gold and silver immediately started moving up after the leak and have spiked further this morning.
If it was not for our significant experience with the leaks from the Fed over the years, we would have been inclined to upgrade gold and silver to buy.
Over years we have learned that lots of times the Fed is simply jaw boning the markets with talk and never follows through. For this reason our upgrade on gold and silver is only to neutral with a positive bias. Our method takes into account both risk and reward. We give trading signals only when risk reward ratio is favorable. Here there is significant potential reward but the risk is very high.
Resistance level is $1607 to $1611 and then $1628 to $1635.
The first support is $1593 to $1600 and after that $1566 to $1572.
As always we will keep a close watch on gold and silver. If there is a favorable risk reward trading signal, we will provide specific details on the Real Time Feed.
Gold futures are at $1599, silver futures are at $27.21, and oil futures are $88.97.
S&P 500 resistance levels are 1339, 1348, and 1352; support levels are 1330, 1324, and 1312.
DJIA futures are up 125 points.
