Tomorrow is the latest policy statement by the FOMC and as such always creates certain types of havoc in the markets.  If Bernanke and the Fed announce the actual commencement of the QE program that they promised back in September, then this latest relentless attack on the price of Gold today can be seen as just another delaying tactic before the process gets underway in January.   We saw more strong buying after the European open this morning that ended just before the open of the U.S. equity markets, with the assault coming at 9:15am and came in three waves until the bulls stood their ground near $1705 per ounce.

When I look at the daily chart of Gold at this point I see an alternating pattern of outside and inside days which is truly abnormal.  Inside days — where the price violates neither the previous high or low price — are relative rarities, usually no more than 20% of total days.  Gold consistently trading within the range of the previous day’s range is a dead give-away that there is a suppression operation going on right now that will relent when the Fed will allow it to.  At this point I’m betting on next Friday’s options expiration, but tomorrow’s FOMC policy statement is a strong candidate .

Gold is trading against Euro strength right now.  With the Euro re-capturing $1.30 today that was cover enough to see Gold under pressure until the European close.  Silver is trading in perfect sympathy with gold and it looks like Gold is setting the market for both.  The last rally in Gold was driven by short-covering in Silver which flamed out before the important $35.50 level.