SD Monday Outlook: Time to harden those defenses. The Fed is out in full force this week, and that is not good news for gold and silver…
Two weeks ago we discussed the Fed radio silence for the entire week before the FOMC meeting.
This is what it looked like:
Last week we of course we know what happened, which was basically nothing until talk turns into action.
This week, however, it’s going to be all about talking the markets. Every day of the week there are Fed speakers. What is particularly interesting is that today, Monday 9-25, the Fed will be jawboning in the morning, in the afternoon, and in the early evening.
Prepare for an all-out assault from the Fed, in addition to a heavy hand in the market (behind the scenes and not spoken of in the MSM of course):
What is the message here? The Fed is holding control of these markets like the over-protective parent who walks around with their kid on a leash. The kid is also wearing elbow pads, knee pads and a helmet. Not only that, but the Fed is carrying the kid even with all the measures taken to ensure “safety”. These markets can no longer walk on their own.
Last week finished the week rather optimistic. Gold and silver fought hard and finished above the whole numbers.
For now, seeing as how the Fed will be engaged in their main policy tool (talking the markets) in addition to gold and silver starting the week off under considerable pressure, we might want to just cast aside the optimism and brace for impact.
And because we know the routine, let’s focus for a minute on the importance of moving averages and how they have an impact on gold and silver prices.
Here is that all important 50-day moving average in the gold price:
Last night, at exactly 7:19 p.m. EST on Sunday September 24th, the gold price broke through the 50-day to the downside.
That is a very bad sign. Recall that every time we have fallen through the 50-day, gold has gone lower, but as long as we remained above the simple moving average indicating what the average price of the yellow metal is over the last fifty days, we have stayed positive on the price action.
The question in gold is this. Does a Sunday night piercing count? Is that the “bounce” off the 50-day we are looking for? For now that remains to be seen. Either way it is an omen that we are now forced to deal with.
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