Gold Rally Continues In Face of Soaring U.S. Dollar Index

GOLD

Yesterday, the Federal Reserve lowered the Fed Funds rate by a ¼ point, and announced they will end quantitative tightening in a couple months. Gold, Silver and equity traders had hoped for a ½ point drop, and the markets dropped. In early morning Asian trading, Gold tested the $1,400 support level and held. This morning the Senate passed HR 3877 with a 2/3 vote. This budget legislation abolishes the debt ceiling for two years and increases spending by 320 billion this year. The bill will be signed by the president. I believe this extraordinary spending bill caused interest rates to drop, and helped Gold to rally back above the $1,430 per ounce. What is truly amazing is that today Gold rally is the in the face of the soaring U.S. Dollar Index trading at a 2-year high, over 98.40. At 11am PT today, Gold is trading at $1,437, up $17 on excellent volume.

SILVER

Silver sold off with Gold in early Asian trading, breaking below the important $16 per ounce support level. Silver briefly reached a low of $15.90 before seeing major buying, and quickly moved back above $16. At 11am PT today, Silver is down $0.07 per ounce, trading at $16.28 on excellent volume.