The Fed today announced that it will make "unlimited" bond purchases (QE infinity), as well as buying mortgage-backed securities, corporate bonds, and bond ETFs. It's also opening two new credit facilities for businesses and expanded the existing facilities. Basically it's going to print as much money as it takes, and it's going to do it very quickly. This should stop the big deflation spike we've been seeing, and it should send gold and bitcoin soaring even more than they already have this morning. I bought some UGLD and some short-term calls on GDX and GDXJ. Note the nice bullish engulfing candle on the chart.
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It probably goes without saying that this 6 trillion dollar relief package will further weaken the dollar and further strengthen gold.
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Gold has paused for good reason. The price collapse in oil today may support the dollar (low oil prices are deflationary) and offer resistance to gold (gold moves opposite the dollar. I'm not sure what will happen from here, but I went ahead and took profit on the trade.
