The language Bernanke uses in his post-meeting press conference will be interesting.

George Goncalves, interest rate strategist at Nomura, thinks Bernanke will use this opportunity to clarify some communication hiccups that the Fed has been having:

Thus the key event this week is the June FOMC meeting. If they strike the right tone, in our opinion, that should help keep the bullish price-action intact. We believe a Bernanke led FOMC will take this opportunity to make a clear distinction between tapering QE programs versus its commitment to keep Fed Funds rate “lower for longer”. A combination of Bernanke‟s Q&A, an updated SEP forecast (where fed hike expectations can shift to out years) and a clear statement that codifies policy differences while flagging concerns over inflation would set the record straight.

Jon Hilsenrath of the WSJ: The key thing to watch is the Fed’s forecast of the path of the economy.

At the conclusion of its two-day policy meeting on Wednesday, the Fed will release its updated projections of growth, inflation and unemployment.

The evolution of these forecasts is a critical issue. Fed officials are unlikely at this meeting to change their $85-billion-per-month bond-buying program—launched to boost growth by pushing down long-term interest rates and pushing up asset prices, and spurring spending, hiring and investment.

But what they say about the economy will send important signals about what they expect to do in the future. If they maintain confidence in their economic forecasts, it could signal they think they’re on track to begin pulling back the program later this year.

Mike O’Rourke of JonesTrading explains why Hilsenrath is likely spot-on in his assessment:

 We think this article is extremely important and provides a clear path to the correct interpretation of the FOMC’s view.  The key takeaway will be to focus on whether the Fed maintains the forecast released in the March Summary of Economic Projections (SEP) when the June SEP is released.  The reason that we have a high degree of confidence in the Hilsenrath article is that nearly identical sentiments were expressed by another important Fed watcher, Greg Ip of The Economist in a CNBC interview.  Many will remember that Ip was Hilsenrath’s predecessor as the Fed watcher at the WSJ.    

Dennis Gartman, Founder and Publisher of The Gartman Letter, gave a very interesting interview on CNBC where he shared his insights into gold. His take home messages were:

1. The high in gold is almost 2 years behind us.

2. We’ve failed to make a new high and broken many trend lines support.

3. Gold is a broken commodity and is likely to head lower.

4. Gold is likely to head lower even with all the news of the Fed expanding reserves to the system.

5. The trend seems to be downward, and if $1,200 is broken, the next level of support is $1,000.

CNBC commentator Brian Sullivan provided the best insight of the video when he described gold as an aging athlete, where it still has its fans, but its best days are behind it, and it is unlikely to repeat the glory days. Brian put it best when he says “gold’s had its day.”

The second best insight provided in the video is an observation I’ve made many many many times in other articles. If gold can’t rally on all the good news out there, what will make it rally? Dennis put it best when he said “the oldest rule in commodity trading is that if something can’t rally when the news is bullish, it is a bear market.”

In conclusion:

because gold is simply valued upon what someone else is willing to pay for it, the simplest methods of valuation are often the best. Gold doesn’t generate a cash flow, there is simply a supply and demand, and where the two meet is the price. Supply is pretty much fixed in the short run, so demand becomes the determining factor for the price. Demand is shifted by the news and outlook for gold. Currently, even with all the good news that should be bullish for gold, the price continues to deteriorate. In my opinion the aging athlete is an excellent analogy for gold, and the markets seem to be agreeing that it is simply time to retire gold and move on to the next emerging bull market.

(click HERE or on image to watch in full)

Disclaimer: This article is not an investment recommendation. Any analysis presented in this article is illustrative in nature, is based on an incomplete set of information and has limitations to its accuracy, and is not meant to be relied upon for investment decisions. Please consult a qualified investment advisor. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice.