Yesterday, the FOMC left gold longs feeling exposed and vulnerable.  Gold had moved up over $100 on the year and with it failing to maintain momentum over $1,300, the FOMC provided reason enough for traders to exit long positions.  The Fed said the US economy is expanding at a “solid pace” and the expectation is that rates could rise as soon as June.  Gold began to slip in the overnight session and then was hit even harder in the NY session with volume on the electronic exchange exceeding 230,000 lots (23,000,000 ounces).  Gold has now traded lower in four of the past five trading sessions and has found temporary support at the 50 day moving average of $1,252.50.  In the absence of bullish headlines, which have largely fueled gold’s rise this year, the yellow metal is looking weaker and should consolidate around these levels.

Silver was consolidating nicely around $18 for the past week but collapsed as gold sold off today.  It finished the day down over 5.75% and finally managed to find bids ahead of its 50 day moving average at $16.62.