Gold And Silver Investors Cautious Ahead Of Federal Reserve Meet:

Sharp profit taking has experienced across gold and silver.Both have corrected nearly 10% within 2 days.There is a American federal reserve meet tomorrow and investors are cautious about their holdings in precious metals.Speculators have cut their long positions ahead of this event.

Federal reserve meet outcomes are expected tomorrow at (26th August 2011) 8:30 p.m (IST).

Traders are expected the comments about following important things:

1.QE3: Quantitative easing means shortly more printing of money and introduce more paper currency in the system.There have already 2 rounds completed.This is done to enhance liquidity in the syatem and more job creation.

2.Inflation: Comments about inflation are more important for silver.If there are indications about rise in inflation,it will be positive for silver and gold.Both have remained preferred hedge against inflation.

3.Federal reserve rates:As already declared by Fed,fed rates will be as low to 0.25% at least till mid 2013.

4.Other economic indicators: Comments related to other economic indicators likes unemployment rates will decide the trend of base metals and crude oil.

Short term traders should avoid taking position especially across silver till furthur trend is set and it is possible after tomorrows event.