By Barry Stuppler - MintStateGold.com
Yesterday was an extraordinary trading day for gold. The value of the U.S. Dollar increased 4% versus the Euro, and gold sold off to $1,680 per ounce, then rallied to close up for the day at $1,720 per ounce. I believe trader’s call this type of price action an intraday reversal, and very short term bullish for gold. At 11am PDT, gold is trading at $1,734.10, up $17.30 per ounce on the day in average trading volume and a tight $12 high/low price range.
The question on most traders mind today is whether or not the Federal Reserve will move forward with a QE3. The equity and precious metal markets are behaving with the anticipation that Federal Reserve Chairman, Mr. Bernanke’s press conference is going to announce future plans of another round of monetary stimulus, at 2:15pm EST today. The belief is that the Federal Reserve will lower future expectations for GDP and raise projections of unemployment in the coming years. The initial FOMC statement, released at 12:30pm EST, did not mention any new monetary easing programs, but will continue to hold interest rates at zero until mid-2013.
Silver is up $0.82 today, trading at $34.10 per ounce, holding within a tight 49 cent price range. Any announcement from the Federal Reserve today indicating quantitative easing coming in the near future, would be very positive for the silver price.