Trying to make sense of these markets is impossible. If I told you U.S. stocks would crash 14% in one week – how high do you suspect gold would jump? $50…$100…$150? I would guess at least $100 but probably more. Nope – Gold prices are down over $50.00 on Friday.
All week I’ve been monitoring the FedWatch Tool for clues regarding interest rates. On Tuesday, the odds for a March 18th rate cut started at 14.4%, by the close they had jumped to 27.7%. As we head into the weekend, they’re now proposing a 100% chance for a 0.25% cut and a 47.2% chance for a 0.50% cut.
Note: The odds for a .50% cut were 0% yesterday. The Fed may move over the weekend.
I try not to cry manipulation, but it’s hard to justify this week’s price action as natural. It seems several forces are at play, much out of our control. Someone wants the Fed to ease, and this week’s crash will make that possible. Sadly, many investors were hurt and shaken out of their positions in the process.
I don’t have a crystal ball, and I’m not sure what will happen next week. But I do know governments are running out of options to stimulate economies; interest rates are already at all-time lows. All they have left is money printing, and that always results in higher precious metal prices.
Don’t Let The Bull Throw You: Despite all the volatility, precious metals and miners are in long-term bull markets. There will be pullbacks and corrections, sometimes deep – don’t let these events shake you. The bull is powerful and will do its best to throw you. Grit your teeth, cinch down that flank strap, and hold on. Prices are going much higher.