Gold & Silver; Need MOAR Buying

Pre-FOMC comments are: 

We continue to feel that the tapering effect will fizzle out after the FOMC statement and the next big item will be the US debt ceiling. On that basis, we felt the precious metal will remain well bid as long as it can trade above its support level. We remain cautious of a possible “sell the rumour, but the fact” scenario. With that in mind, precious metal has got rooms to look higher assuming all the other conditions are viable. 

Post-FOMC comments are: 

Looking ahead, the new Federal Reserve chairman will instil market direction and confidence with easy monetary policy and reduction in QE programme will be an on-going debate. It is not the nail in the coffin for gold bulls as long as the printing press continues. However, the precious metal industry will continue to trade in the mercy of the next FOMC meeting (October 29th-30th and December 17th-18th). Put that down in the calendar folks and get those helmets out again at least 3 weeks before the next Fed press conference. We envisage that the next two months will see no tapering threat until we draw closer to December 2013. Taper will return and this time it might come back with a vengeance. 

Debt ceiling debate will now take over as the major headline after the dovish FOMC statement. Bernanke is right to worry about being too early to taper as the labour market recovers and low inflation has always been something he addressed. Low inflation will give the Fed more rooms to remain dovish for now. 

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