Well so far gold is up and holding steady before the Fed announcement.

In my opinion the US Fed has 2 choice, continue the money printing aka quantitive easing which will support the bond and stock market but lessen the appeal of holding the US dollar. This is not such a poor choice since few intelligent people think the dollar is appealing anyway. The US dollars decline can be controlled by other central banks jawboning and market interventions.

This will be immediately very bullish for gold. If one recalls when the FED first announced their quantitiive easing, gold recovered immediately the I beleive aprox $60 it had been knocked down that day prior to the announcement.

The secound choice the FED has is not to continue the money printing in which case I beleive the US treasury bond market would crash along with the stock market and eventually the US dollar anyway. This is because the US dollar is just a proxy for the health of the US economy and as the US economy and finances of the US Govt collapse so does the dollar eventually.

Logically speaking then in my opinion the first choice is the easiest and least destructive in the short term.

Either choice is bullish for gold but the first choice should have the most immediate effect and that is what the gold price, gold stocks and recent news I beleive is telegraphing.

We will see shortly in any event.

Regards,

F.F.