Given the current economic uncertainty, the Federal Reserve is prepared to stimulate the economy to improve growth and employment. In the backdrop of a fight on the debt ceiling Ben Bernanke inflated markets as investors rushed to purchase hard assets.
“The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying a need for additional policy support,” Mr. Bernanke said, suggesting the central bank had several ways to ease financial conditions if necessary.
Prices of gold have broke out as investors perceive that the FED will undertake a QE3 or keep rates at these levels for more than a few quarters, but for a few years. Gold has made a new all-time high and today’s dovish comments created the catalyst for higher prices.
The trade, purchase a daily binary call option if gold closes above 1576, with a cap at 1600.
Signal Summary
Asset : Gold
The trade : Binary Call Option
Expiry time : End of day
When : On a daily close above 1576, with a cap at 1600.