Gold And Silver Get A Boost From The Fed. Here’s How To Profit From The Trends

Gold and silver are starting to rebound after the Federal Reserve made its decision with regard to interest rates. In this particular case, it's a very interesting turn of events as the rebound has little to do with the Federal Reserve's decision and more to do with their comments and the future market and economic outlooks. Today, we'll briefly discuss the Federal Reserve's decision and why they made it, why it's having such an affect on the value of gold and silver, what we can expect to see moving forward, and how binary options traders can profit from the trends.

The Federal Reserve Decides To Keep Interest Rates Low

Interest rates have been a huge discussion for investors recently; and many expected the Federal Reserve to increase its rate in September. However, that didn't happen. For now, rates will stay low; and there are two major factors playing a role in this decision…

• Global Economic Outlook – The Federal Reserve must take into account how their decisions will affect the global economy. If interest rates are increased, US consumers will have less money to spend as more money will go to interest. Therefore, our trading partners are likely to feel the pain as US consumers start to purchase less and less imports. However, the global economy isn't ready for this kind of pressure quite yet. With China, Europe and dozens of other economies struggling, a US rate hike could have sent the global economy on a downward spiral.
• US Economic Outlook – It's also the goal of the Federal Reserve to assist in US economic growth. Unfortunately, it doesn't seem as though the US is ready for the pressure quite yet either. With the loss of 17,000 manufacturing jobs in August, coupled with declining consumer prices in the month, the Federal Reserve had to take into account how higher rates would affect consumers; and they clearly don't think that's a good idea at the moment.

Why This Caused Gold And Silver To Climb

Generally speaking, low rates are a great thing for the market. They move interest away from bonds and make stocks look even more appealing. However, in this particular case, the market saw declines; not because of rates, but because of comments made by the Federal Reserve. The reality is that the Federal Reserve is concerned about the global economy. When economic conditions are poor, consumers and businesses spend less; in the end, trickling down to poor market activity. Therefore, investors are concerned that we're likely to see more declines in market values moving forward; and it's a very valid concern.

As a result, investors are starting to look for safe havens. In many cases, investors would look to a mix of gold, silver, and treasury bonds as a way to keep their money safe. However, with low interest rates, treasury bonds are pretty much out of the loop and investors are focusing heavily on gold and silver. This ultimately increases the demand for these precious metals; and therefore, increases their value!

What We Can Expect To See Moving Forward

Considering the state of the global economy and the state of the market, I'm expecting to see more gains in safe havens like gold and silver moving forward. These gains are likely to last until we start to see positive movement in emerging economies around the world as well as worldwide markets.

How To Take Advantage Of The Trends

While gold and silver are on a short term trend upward, I believe that the trend is likely to turn long term. Therefore, it's time for binary options traders to start looking for strong call option opportunities to earn a profit from these trends. This means following trend lines, support trend lines in particular. When the values of these commodities falls to support, start purchasing calls to take advantage of the resulting upward movement.