With gold and silver surging along with stocks and the U.S. dollar trading lower, today a legend in the business sent King World News a powerful piece discussing the surge in gold, which is being fueled by disappointment over the Fed's decision not to raise rates as well as the chaos in Greece.

From Art Cashin's notes: "While the media pundits paraded across the screens talking of two rate hikes by yearend, the markets were expressing a different view.  Bond yields fell as did the dollar, while gold rose.  Not the reaction one might expect if a rate hike were imminent.

Ultimately, stocks noted the action in other assets and concluded that maybe the economy was not as robust as the pundits claimed.  That led them to ease off the highs going into the close. 

Another Voice On The Fed – Our friend, Peter Boockvar, over at the Lindsey Group was quite disappointed with the Fed's decision to watch and wait  Here's a bit: 

On one hand nothing really changed yesterday in that the market wasn’t expecting a rate hike at all and Yellen and Co gladly obliged. On the other hand, the FOMC reaffirmed their comfort with emergency, depression like monetary policy in the face of clear evidence that the language the Fed has used for three straight meetings on what would trigger a rate hike are being economically met.

Thus, I believe that the concept of ‘data dependent’ has been completely neutered because we have no idea what level of the data they are dependent on. This reminder of how reluctant they are to raise rates just 25 bps off zero certaintly led to the sharp rally in the short end where the 2 yr yield is down by 9 bps since just prior to the meeting. After closing flat yesterday but well off their lows in price and highs in yields, the 10 yr yield is back below 2.30% for the first time in 2 ½ weeks.

Unless I missed it in the Q&A, I didn’t hear one question from the press or one comment from Yellen about the sharp rise in long term interest rates over the past few months. This move higher did not happen in a vacuum and it wasn’t just the influence of higher rates in Europe. The Fed, if not looking, should be actively paying attention to the yield curve. I’ll repeat again, that I believe long yields will continue higher the longer the Fed waits in eventually raising rates. Control of the bond market is at stake here and the FOMC seems to want to wait another 3 months, like much will change between now and then.

Consensus – The focus may begin to shift back to Greece amid continuing rumors of weekend meeting.  Stocks may also revert to internal technicals.  Next week, the week after June Expiration has a negative bias. Stay wary, alert and very, very nimble. ***ALSO JUST RELEASED: An Extraordinary View Of The War In The Gold, Silver, Stock And Commodity Markets CLICK HERE.

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