Thursday, June 16, 2016

Gold shoots through $1300 following the Fed's capitulation for raising interest rates

It took approximately a month and a half to recover from the cartel's last smackdown of the gold price to reach and surpass $1300 per ounce, but thanks to Janet Yellen and the Federal Reserve's capitulation to not raise interest rates at yesterday's FOMC meeting, gold has once again breached that resistance level and is on its way towards new 52 week highs.

I think the first rate hike cycle is over. What Janet Yellen said in response to my question, and if you look at what has happened to the rate hike cycle, is pretty profound. It’s as close to the Fed getting to capitulation as I’ve ever seen, about the efficacy of Fed policy, about the outlook for the economy. - Steve Liesman, CNBC
Perhaps what was most interesting about yesterday's FOMC decision not to raise rates was the fact that for the first time in many months, there was not a single dissenting voice as the choice to do nothing and leave rates where they are occurred with a unanimous vote.

Despite Yellen's usual rhetoric in saying everything and meaning nothing in her followup to the FOMC announcement, the underlying reality is that central banks around the world are running scared of deteriorating economic and financial conditions that threaten the banks, bond markets, and economic growth.  And this is why hedge fund managers money managers, and billionaires like George Soros are shorting the stock markets and buying into gold since they recognize it is the only real safe haven for what is coming.

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