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Gold Takes Off On U.S. Fed Policy Shift


Gold Takes Off On U.S. Fed Policy Shift

A shift in U.S. Federal Reserve policy is among the key drivers of gold’s rise into a new, higher trading range and, potentially, the start of a new gold bull market.

FED Holds Rates – The Truth about its Policy – Gold & Silver Rise

Today is Thursday 31st January 2019 and we are commenting on the FED’s decision not to raise interest rates and FED Chair Powell’s statement during the Press Conference.

The FED was established in 1913 and we shall take a look at its current mandate – this is an instruction from Congress providing the FED with its objectives and goals. There are 3:

1. To obtain maximum sustainable employment
2. To achieve stable prices (inflation)
3. To reach and maintain moderate long-term interest rates.

There are just 3 tools by which it can do this:

1. Open market operations – the buying and selling of
government securities to the open market, thereby achieving
the most favourable price – and provides it with great
flexibility which is why this is often the favourite tool.

2. The Discount rate – this is the interest rate charged by Federal
Banks to depository institutions on short term loans.

3. Reserve Requirements – these are the portions of deposits
that banks must maintain either in their vaults or on deposit at
a Federal Reserve Bank.

The FOMC voted unanimously not to raise interest rates and to hold its policy rate in a range between 2.25 percent and 2.5 percent. The Central Bank said it will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate.

Officials also issued a separate statement addressing the balance sheet, saying they expect to operate with an ample supply of bank reserves.

During the Press Conference, Jerome Powell stated:

“The case for raising rates has weakened somewhat”…… I would want to see a need for further rate increases, adding that inflation would be key and that the funds rate is in the committee's range of a neutral rate estimate, a key measure for the Fed.

Also causing some concern for the Fed are geopolitical issues like the ongoing Brexit negotiations and an economic slowdown in China.

Its going to be accommodative in so far as the data suggests. Powell has also left wriggle room to raise rates or increase his balance sheet run off should the economic data be surprisingly more positive than envisaged, though we can all hear quite clearly that certainly for a number of months ahead we are more likely to see more of an accommodative stance as opposed to a tightening one.

Shortly after the announcement and comments, we saw a dramatic rise in Stock markets with the Dow closing eventually up 434 points at 25,014 the Nasdaq up 154 points at 7,183 and the S&P 500 up 41 points at 2,681. Asian markets have generally opened and closed in positive territory and European markets are mixed but with no substantial moves in either direction.

At the time of writing, the dollar index is down o 95.29 but is still a little stronger than we thought it may have fallen to.

Gold is currently standing very close to our prediction at $1,323 and silver has surpassed the psychologically important $16 level again as we said it would and is standing at $16.11.

The markets are currently digesting the news and crunching the numbers. Gold and silver are on a positive trajectory, and technical analysts quote that a move above $1328 will rapidly move gold up to $1337 (June 14th top) and silver markets now having surpassed $16 could indeed have a relatively clear run up to or near the $16.50 level though this may take a few days.

Please view our latest videos:

FED Holds Rates – The Truth about its Policy – Gold & Silver Rise

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David Rosenberg | Betting Against on the ‘Powell Put’ and the Return of the 'Risk-Off' Trade

Subscribe to Hidden Forces and gain access to the episode overtime, transcript, and show rundown here:

In Episode 91 of Hidden Forces, Demetri Kofinas speaks with Chief Economist and Strategist at Gluskin Sheff, David Rosenberg, about the latest Fed rate decision and his outlook for the global economy. In the overtime to this week’s episode, David provides listeners with a look into his investment strategy and how he is positioning himself and his clients for a global slowdown that he believes may already be underway.
David Rosenberg and Demetri recorded this episode only hours after the FOMC concluded its two-day meeting this past Wednesday. The Federal Open Market Committee decided to keep the fed funds rate unchanged, while simultaneously signaling a strong willingness to begin easing, possibly as soon as next month.

It is David Rosenberg’s conviction that the Federal Reserve has over tightened monetary policy during this cycle possibly by as many as one-hundred basis points – four rate hikes - and that Jay Powell and the board of governors at the Fed are worried that they may have precipitated the bursting of another bubble. This time, however, the bubble isn’t in housing or consumer credit. The bubble in 2019 is in the corporate bond market where multinational corporations have feasted on the issuance of trillions of dollars of new debt used to finance mergers, acquisitions, and share buybacks, while simultaneously cutting back on the capital investment needed to grow their businesses and service their debts long-term.
The last ten years have been a great time for stocks, fueled by a bonanza of free money and an implicit guarantee by the Fed to support asset prices at all costs. But the question has always lingered, “What will happen as the Fed continues to raise rates, normalize its balance sheet and tighten monetary policy?” Is this a new financial paradigm where fundamentals no longer matter and perpetual liquidity is the name of the game or does the global economy’s increased reliance on debt financing in order to drive earnings and levitate asset prices remain as unsustainable today as it has been in any prior historical period? Is this time truly different?

As always, subscribers to our Hidden Forces Patreon page can access the overtime to this week’s episode, which includes a discussion about how David is positioning himself and his clients for the likelihood of a recession and return to bear market territory for stocks and commodities. We discuss the US dollar, precious metals, treasuries, currencies, as well as certain defensive stocks that David believes are likely to outperform the overall market in a downturn. You can learn more at

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Silver Investment Insight by Prophecy Chairman John Lee

Prophecy (TSX: PCY, OTCQX: PRPCF) is developing Pulacayo silver project in Bolivia and Gibellini vanadium project in Nevada. Further information on Prophecy can be found at

My advice to investors to pay attention is to focus on gold and silver mining companies , not copper, not uranium, and lithium or cobalt.

The Federal Reserve cut interest rates on Wednesday (July 31, 2019) for the first time in more than a decade. It was trying to keep America’s record-long economic expansion going by insulating the economy from mounting global threats.

This escalation of the trade war between Washington and Beijing is a new threat to the global economic outlook. The announcement unsettled financial, which led to haven buying of bonds and a broad equity sell-off.

Gold chart shows 6-year technical breakout above $1,380. Head and shoulder pattern indicates imminent reaching of $1,660/oz

Silver could rocket to $25

the gold/silver ratio hits a quarter-century high to revert back from 90 to The average level since 1990 which is 67.

Silver performed well historically after an extremely high gold/silver ratio reading is reached, with an average gain of close to 10% over the ensuing 12 months after the gold/silver ratio hits 90.
China is buying more gold as the trade war drags on; Russia joins the freight.

The rise China’s gold holding reflects the Chinese government’s “determined diversification” away from dollar assets, according to Argonaut Securities (Asia) Ltd analyst Helen Lau. She added that retail demand has also picked up. At this rate of accumulation, China could buy 150 tons in 2019, she says.

Russia’s total gold reserves top $100 billion as central bank adds another 600K ounces in June.
The Russian Central Bank bought 200,000 ounces in May, 550,000 in April, 600,000 in March, one million in February, and 200,000 in January.

During the last decade, Russia’s gold reserves have gone from 2% to 19% (as of the end of 2018 Q4), according to the World Gold Council.

With central banks rushing to buy gold, other institutions and retailers will surely follow.
Further With real estate crumbling, investors rush to gold and silver.

Manhattan real estate had its worst first quarter since the financial crisis, according to a report from Douglas Elliman and Miller Samuel.

Sales fell 3 percent in the first quarter, which marked sixth straight quarters of decline.
That is the longest decline in the 30 years that the real estate appraisal firm has been keeping data.

Ray Dalio says gold will be a top investment during the upcoming “paradigm shift” for global markets.

Hedge fund multi-billionaire kingpin Ray Dalio is seeing a case for gold as central banks (1) get more aggressive with policies that devalue currencies and (2) are about to cause a “paradigm shift” in investing.

Dalio, the founder of the world’s largest hedge fund, wrote in a LinkedIn post that investors have been pushed into stocks and other assets that have equity-like returns. As a result, too many people are holding these types of securities and are likely to face diminishing returns.

“I think these are unlikely to be good real returning investments and that those that will most likely do best will be those that do well when the value of money is being depreciated and domestic and international conflicts are significant, such as gold,” the Bridgewater Associates leader said.

In summary, gold and silver appear to have broken out of multi-year consolidation. With the U.S. presidential election coming in 2020 and the Fed’s having little stomach for a market correction, analysts agree that the path of least resistance for interest rates is down. This will bode very well for gold, silver and precious metals mining shares in the next 12 to 18 months.

My name is John Lee and I am the executive Chairman of prophecy Development. Thank you for watching.

Danielle DiMartino Booth - Central Bank Cheap Money Now A Global Contagion

Former Dallas Fed insider, Danielle DiMartino Booth, spoke with SBTV about the inner workings of the Fed and how the Federal Reserve missed the train wreck which resulted in the 2007 Financial Crisis. Without being alarmist, Danielle presented a factual view of how leveraged and indebted our financial system has become.

Danielle is the CEO of Quill Intelligence ( and author of 'Fed Up: An Insider's Take on Why The Federal Reserve is Bad For America'.

Discussed in this interview:
04:41 How did the Federal Reserve miss the 2007 financial crisis?
08:24 Were the bailouts of failing banks avoidable?
10:08 Why Lehman Brothers was not bailed out?
13:38 Money printing has become an international contagion.
16:36 Stock markets propped by stock buybacks.
20:11 Will the Fed blow up the economy as it unwinds its balance sheet?
22:59 The 'academic' problem of the Fed.
23:40 Inversion of the yield curve.
25:48 There is more 'tinder' to light a financial crisis now than 2007.
27:35 How does the Federal Reserve view gold?
29:40 Dollar's reserve currency status to stay?
35:35 Can we ever trust the Fed?
37:31 Will we see the Fed come out with a crypto coin?

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Forex Weekly Analysis – FOMC Takes Center Stage

Learn how to turn news into profits with our market commentary - learn more here -


The FOMC should take center stage in this week's risk event lineup.

In this video we break down the three core steps of our analysis process:

1) Finding the baseline of the relevant currency (in this case it is the USD)

2) Finding the baseline for the upcoming risk event (in this case it is the FOMC meeting)

3) Establish what type of changes from the FED can cause a significant sentiment shift in the markets to create possible trading opportunities.

Going into this week's meeting the important thing is to keep in mind that the market is widely expecting the FED to cut interest rates by 25bsp.

Thus, any reaction from the cut itself will probably be muted. All the focus will turn to Jerome Powell's press conference as well as the updated FED dot plot.

Check out this week ahead video on how to prepare for this upcoming event.


Highlights of the video:

01:15 - Baseline context for the USD
03:30 - Baseline expectations for the FOMC meeting
07:26 - Possible sentiment shfits
09:47 - Possible currency pairs
11:11 - Learn more about trading phase one and two sentiment shifts


If you find these weekly analysis and trade ideas useful, you’ll love Forex Source. There’s a link below were you can learn more about it -


Fed Minutes This Afternoon Could Cause Stock Market Volatility

In today's stock market update we will talk about Fed Minutes This Afternoon Could Cause Stock Market Volatility

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Bitcoin Drops 5% | Are Altcoins Preparing To Shift?

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