The FOMC Meeting And What It Means For Gold And Silver
Monday, September 23, 2019 at 08:53PM
Silver Prices

Introduction

The FOMC monthly meeting has just concluded and predictably the Federal Reserve cut interest rates again by 25 basis points and so the new target range is 1.75% to 2%. They also guided that there was a possibility of one more rate cut by the end of the year.

The immediate reaction was that the S&P 500 fell dramatically before recovering to close at 2992. The US Dollar rose 0.32% to close at 98.14. Gold prices fell to around $1485/Oz before recovering some of the losses to close at around $1515/Oz and silver prices followed suit falling to around $17.50/Oz before regaining some of those losses to close at $17.85/Oz


It should be noted that interest rates across the globe are either negative or close to zero as each central banker tries to remain competitive with other nations. This race to the bottom by all concerned has the effect of cancelling or negating what other central banks have done and so the benefit tends to be negated.

As we have previously noted if you live in Denmark and take out a negative rate mortgage you have the benefit of paying off the capital without interest and your lender also pays some of the debt for you. This situation cannot last as sooner or later there will be a spate of bankruptcies in the financial sector.

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 gold did well today and silver jumped dramatically to $18.60/Oz which generated some magnificent gains for our silver stocks.

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