PRECIOUS METALS RECAP 3/13/2012

April Gold closed down 28.6 at 1671.2. This was 9.1 up from the low and 35 off the high.
May Silver finished up 0.168 at 33.581, 0.214 off the high and 0.461 up from the low.

The gold market sold off this afternoon in the wake of the FOMC meeting results in which the Fed indicated that it will basically continue its recent monetary policy and not embark on QE3. This undermines support for gold and other precious metals as it eases concerns over inflation. This is in sharp contrast to the stock market, which extended an earlier rally on the release of the Fed statement. Both the precious metals and the stock market broke on the February Retail Sales number early this morning, as that number came in below trade expectations but still at 5-month highs. However, the stock market quickly rebounded, while gold seemed to stall around unchanged on the day as it anticipated the FOMC results.

Silver followed gold lower this afternoon and appeared to have a delayed reaction to the FOMC statement. The Fed indicated no change in its course of keeping rates low, but it also did not offer any further quantitative easing. The report suggested the Fed was seeing some improvement in the economic outlook, and the trade seemed to take this as an indication that it was less inclined to err on the inflation side in its policy. While gold broke sharply on the news, silver held steady initially and seemed to be drawing some support off of the big rally in the stock market. However, by early afternoon May silver sold off and managed to break below Friday's low.