5.19.2016. Prior to the FOMC statement yesterday, gold was already on shaky ground as it continually tested support ($1,268 at the time) on a trendline dating back to the beginning of the year. Post FOMC, gold was unable to maintain its footing above this area and the yellow metal completely broke down. The Fed minutes rattled markets that had, until recently, all but ruled out the possibility of a US interest rate rise in June. Fed officials stated that a June hike is now “likely” if the US economy continues to improve. The USD spiked against a basket of currencies and reached its highest level in nearly two months while equities and commodities plummeted. Despite strong physical buying out of Asia in the overnight session, gold fell yet again today before finding support around the 50 day moving average of $1,249.50. After completely outpacing gold on the move up in April, silver has now officially caught up with gold on the move south. It also found support at its own 50 day moving average of $16.30 and this remains the near term level to watch.
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