Silver Prices Pop After Recent Fed Statement
After last week’s outstanding employment figures, investors expected a fairly dull FOMC release yesterday. After all, what more is there to say other than “gee, things seem to be going well, so we’re going to wait for a while before we do anything.”
And that’s what we got. The FOMC statement said current monetary policy is “appropriate” (strong language there, haha), and don’t expect any interest rate cuts in 2020.
So why did silver (and gold) go up following these remarks?
The most probable reason is that investors don’t quite believe the “everything is just fine” tone of the remarks. There is more uncertainty in the world economy than US employment numbers would indicate, as shown by this morning’s very unexpected pop in jobless claims. So investors are probably showing their concern by remembering that gold and silver – traditional stores of value through uncertain times – are low right now, just came off a decent earnings season, and buying strength at low prices is usually a good idea.
We would say “key Warren Buffett soundtrack” here, but Buffett is famously against gold, silver and other historical stores of value. Aaah well, everyone has to have a flaw.
Your friendly Gold Enthusiast expects this pop in silver is likely very short-lived, so don’t worry if you didn’t load up two days ago. You’ll get your chance later on. But if you see precious metals drop back to their recent support, you might consider a small buy if you have some spare cash.
Signed,
The Gold Enthusiast
DISCLAIMER: The author holds no position in any mentioned security. The author is long the silver sector via small positions in USLV, PAAS and SVBL. He may daytrade around these positions but has no intention of trading out of these core positions in the next 48 hours.
Note: This article originally appeared at The Gold Enthusiast on December 12, 2019.
Category: Commodities
