After the FOMC announcement of no rate hike

• UP: gold, gold miners, biotech
• DOWN: dollar, Dow, S&P500

Citing “recent global economic and financial developments,” the Federal Open Market Committee voted to maintain the near-zero interest rate policy that was put in place during the throes of the economic crisis in December 2008.

In so doing, the U.S. central bank evidently was in accord with major international authorities, notably the International Monetary Fund and the World Bank, which had urged the Fed not to raise its interest rate target for fear of worsening the turmoil in emerging markets.

(click for live chart)

Inflation, however, continues to fall short of the Fed’s 2% target (which uses the personal consumption deflator, not the more familiar consumer price index). And the Fed sees the risks posed from abroad posing downside risks to prices and the economy. Here’s the key sentence from the FOMC statement:

“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.”

Which translates to the Fed keeping rates lower for even longer than previously projected.

***

the following day:

next day following Fed announcement, Fri 9/18/15

for the week:

The final stage of the commodity bull market

Update 10/13:

gold vs S&P500

gold - 5 years

The below was written on 9/2/12:

The commodity bull market will end. All bull markets end. And when it does end, it will be replaced by another bull market - probably in stocks.

But before it ends, it will go through a final stage, typically called a blow-off stage.

And these blow-off stages are characterized by massive upward price trends - parabolic moves.

An example below is the gold bull market of 1970-1980:

 

Notice that this bull market was interrupted by a substantial 50% correction between 1974 and 1976.

But then the bull market continued, and in 1979-1980, the price of gold screamed higher in a very pronounced parabolic move.

Gold stocks mirrored this move, skyrocketing in 1979.

My broader point is that we have not yet entered this blow-off stage - and that is the greatest proof that the commodity bull market is still intact.

Gold Stages Key Bullish Technical Reversal

On Thursday gold staged a bullish ‘outside day.’ In traditional technical analysis, an outside day is traced when the low of the day is lower than the previous day’s low and the high of the day is higher than the previous day’s high. Candlestick or OHLC chart displays make it easy to see. In the context of where it occurred on the chart, this is a bullish key technical reversal in gold.

** weekly **

Update 24 May 2013: Gold had a big breakdown dropping 20% in the first 5 months of 2013

Market outlook : gold (24 Aug 2012)

5-year chart

1-year chart 

Market outlook : gold (6 Aug 2012)

With the dollar weakening, gold is starting to look interesting. Earlier in the week, while the dollar was trying to move higher, gold retreated. However, the weakness in the greenback on Friday sent gold bouncing right off its 20 day EMA. Technically, gold looks as solid on a daily chart as it has in the past six months. The 20 day EMA has crossed above the 50 day SMA (golden cross) and the daily MACD recently broke above centerline resistance. Gold has price resistance in the 1625-1635 per ounce range. If that level is cleared, gold could very well be off to the races once again. Key support has been holding in the 1525-1550 area. Clearly, the trading range is squeezing, indicating that a bigger, more powerful move is likely on its way.