U.S. Inflation Increase Causing Federal Reserve Speculation

GOLD

The recent 8.6% increase in U.S. inflation and the spectacular raise in the 10-Year Treasury interest-rate (3.46%) has led to a lot of speculation about what the Federal Reserve will do at the next meeting. The declines in the financial markets and precious metals are saying the Fed will make a .75% increase at tomorrow’s meeting. A larger or smaller increase will dramatically affect prices in late Wednesday and early Thursday trading. Gold reached a low this morning of $1,809 before seeing sizeable bargain buying. At 11am PT today, gold is trading at $1,813 per ounce, down $17 on excellent volume.

SILVER

Silver briefly broke below the key $21 support level this morning, reaching a low of $20.87 per ounce. Many traders are waiting to see what the Fed does tomorrow before taking a position in precious metals. Silver is currently trading above and below the $21 level. At 11am PT today, Silver is down $0.27 per ounce, at $21.05 on heavy volume.