Gold and Silver Rally as Fed Cries Wolf, Again

5:49 AM

July 28, 2016 -- As widely anticipated, Fed Chairperson Janet Yellen and the FOMC decided to leave interest rates unchanged on Wednesday. But the big rally in the Treasury market and in precious metals came as a big surprise.

The FOMC insisted -- as they have done again and again over the past few years -- that the U.S. economy is strengthening, the worst is behind us, and the Fed may start withdrawing stimulus as soon as the next meeting. But once again, interest rates remain near zero -- the lowest levels ever seen throughout most of recorded history.

What made yesterday's reaction in the bond and metals markets so interesting is investors may not be believing the Fed anymore when it says interest rates could soon rise.

Perhaps investors were also looking at the very disappointing report on Durable Goods Orders -- also released yesterday.

At some point, however, central bank officials may need to actually implement the policy they keep talking about -- or their credibility is in danger. Yesterday's rally in precious metals suggest we could be nearing that point.

Live prices at show gold currently trading at $1,345.10 per ounce on the global market, and silver is coming in at $20.43.

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