FOMC Statement Has Important Effects on Gold and Bonds

By Rod David  SEP 13, 2012 3:15 PM

Gold reached its target, while other targets elsewhere held.


The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today’s Highlight: FOMC policy statements always have at least some effect. Thursday’s price action compensated for those sessions that had the least effect. Gold reached its target, while other targets elsewhere held.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
The immediate reaction to Thursday’s FOMC statement was to spike up sharply and fill two outstanding gaps above. But the session ended sharply lower, next targeting 79.05.

Sep Contract EC; (FXE)
Wednesday’s narrow ranging after having gapped up undermined the rally’s credibility. But it extended anyway after a dip filled the gap back to Tuesday’s close. The 1.2955-1.3020 area being tested offers substantial resistance back down to 1.2750.

Dec Contract GC; (GLD)
Wednesday’s reaction down from only a shallow new high was not bearish enough to derail the rally. Thursday’s FOMC news triggered a surge that did fulfill the 1760.00-1770.00 target area by testing it up to 1775.00. There is potential for extending up to 1814.00 so long as 1750.00 holds as support.

Sep Contract SI; (SLV)
Wednesday’s test of the 32.95 pullback limit kept the rally’s momentum alive. Thursday’s FOMC news triggered a surge that attacked 35.00 to within $.15. The 35.40 target remains intact.

30-year Treasury
Dec Contract US; (TLT)
Thursday morning’s narrow ranging in slightly positive territory up to 148-14 did not prevent a very negative reaction to the FOMC news down to 146-05. Back above 146-30 would target 150-04 or 150-18.

Crude Oil
Oct Contract CL; (USO)
Wednesday’s second consecutive session of ranging around 97.00 resistance only further undermined the recovery’s credibility. It didn’t prevent probing fresh highs up to 98.58 Thursday morning, but those highs disappeared back under 97.00 in reaction to the FOMC news. That dip was recovered almost entirely up to 98.35. It’s still difficult to give the rally much credibility for extending higher.

Natural Gas
Oct Contract NG; (UNG), (UNL)
Thursday’s dip to 2.96 was recovered up to 3.05, suggesting the 3.08 target will at least be tested.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
No positions in stocks mentioned.

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