Not much happened on the markets yesterday as investors were waiting for signals from the Fed. Gold, silver and mining stocks moved slightly lower. The situation remains tense.

On Monday, the Euro Index moved to the declining long-term resistance line without breaking it once again. Last week when we saw such move, the GLD ETF moved above $122. All GLD managed to do on Monday was rally to $120.77 after which it declined and closed the day only 0.26% higher, at $119.69. It declined to $118.65 despite the euro's small rally on Tuesday. Gold continues to underperform and this week's "strength" was not true strength.

With the FOMC decision pending, we were asked what we think the outcome might be and in today's Market Alert we reply to this important question. The situation is not simple as there are many ways in which the Fed can start "tapering" and not all of them are really meaningful. What will matter most in the short run is how the markets perceive the announcement and what they have been expecting.

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Gold, silver and mining stocks rallied yesterday along with the Euro Index, but not everything about this rally is bullish. Last week, when the Euro Index moved to its declining long-term resistance line, the GLD ETF moved above $122. Yesterday all GLD managed to do was rally to $120.77 after which it declined and closed the day only 0.26% higher, at $119.69. Gold continues to underperform and yesterday's "strength" was not true strength.

With the FOMC decision pending, we were asked what we think the outcome might be and in today's Market Alert we reply to this important question. The situation is not simple as there are many ways in which the Fed can start "tapering" and not all of them are really meaningful. What will matter most in the short run is how the markets perceive the announcement and what they have been expecting.

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Quite a lot happened last week in the precious metals market, but actually not much changed. The XAU index (proxy for mining stocks) closed the week well below the rising long-term support line and below the support created by the previous 2013 low. The HUI Index (gold stocks) moved slightly higher last week (less than 3 index points), which didn't change anything - it remains weak and below critical support levels. Gold, however, rallied on Friday - does this change anything? You'll find more information in today's Market Alert.

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Gold and silver gave us another stomach churning ride this week:

• Gold broke below the rising long-term support line last week, bounced back above it early this week, only to fall below it once again
• Similarly to gold, silver showed strenght but declined on Thursday
• Gold responded only to the upward moves in the USD Index
• Mining stocks unsuccessfull attempt to move back above the long-term rising support line and the 2013 low

The long-term picture for precious metals seems to be less stressful thanks to the ZIRP (zero interest rate policy), which is here to stay even though recent official numbers of employed look very optimistic. We are still far from reaching Feds' thresholds for the labor market and inflation.

If you would like to know if gold investors are going to need more Maalox (or how much) next week, we invite you to read today's Premium Update.

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The GLD ETF declined yesterday on volume that was greater than the volume that had accompanied Tuesday's rally even though the rally had been much bigger than the decline. This is a bearish sign, as it indicates that the volume that should have accompanied Tuesday's rally, should have been much higher than it actually was.

From the non-USD perspective (meaning the gold:UDN ratio), gold is at the rising medium-term support/resistance line after closing there last week, so at this time there is no meaningful breakout to speak of.

How much changed? How much of this could affect your portfolio? Sign up to our Premium Service and read more.

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