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Gold and Silver Rocket Higher, Dollar Plunges, After FED Fails to Hike Rates

Gold and silver prices both rocketed higher, as the dollar plunged following news that the FED would not hike interest rates in March. The FOMC kept the target range for the benchmark federal funds rate at 0.25% to 0.5%. While this lack of a hike was widely expected, the big news lighting a fire under commodities was that the FED shifted from a dot plot suggesting 4 rate hikes this year to one suggesting only 2.

The gold price shot up $31 to $1,263 and the silver price advanced by $0.36 to $15.61. These moves represent gains of roughly 2.5% and 2.4%, respectively. Gold regained over half of the pullback suffered over the past few days.

gold silver fed

Gold and silver prices are now likely to continue their 2016 uptrend. However, gold still needs to clear $1,287 before we can be fully confident that the next upleg is underway. We believe the FED is backed into a corner and will be unable to hike rates as many market participants have anticipated. They scaled back forecasts for how high interest rates will climb in 2016, citing the potential impact from weaker global growth and financial-market turmoil on the U.S. economy.

The FED’s inability to raise rates will continue to be bearish for the USD and bullish for precious metals going forward. If anything, the FED may need to lower rates again or introduce a new form of monetary stimulus in order to keep the equity markets from crashing. It is certainly going to be an interesting year.

Some of the best-in-breed mining stocks have seen their share price double so far in 2016. The stock we highlighted yesterday advanced 12% today, outperforming gold and the GDX miners index by a wide margin. If you aren’t yet profiting from this resurgence of the gold bull market, please consider joining our premium membership for less than $1 per day: https://goldstockbull.com/members/signup.php

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By | 2017-03-23T14:06:13+00:00 March 16th, 2016|Gold & Silver Commentary|

About the Author:

Jason Hamlin is the founder of Gold Stock Bull and has been investing in precious metals for over 20 years. Jason spent nearly a decade in analytics for the world’s largest market research firm, before finding success investing full time. He launched Gold Stock Bull in 2005 and turned his focus from helping fortune 500 companies to helping individual investors. Jason is a student of Austrian economics and a proponent of cryptocurrencies such as bitcoin and ethereum.