Middle East unrest and precious metals investing

Even with unrest rippling through the Middle East in relation to the US, the precious metals are markedly quiet so far today as traders wait on the sidelines ahead of the FOMC statement.  Protesters, allegedly reacting to an obscure, amateur film critical of the Muslim Prophet Muhammad (although others allege it was an attack planned by Al Qaeda to coincide with 9/11), stormed the US embassy in Libya killing the US ambassador and three other American state department employees.   This event has subsequently caused a contagion in the broader region as protesters have gathered in droves around US embassies in Yemen and Cairo, Egypt.  Developments should be closely watched in regards to this story as political turmoil in the Middle East has traditionally been bullish for gold.

While political turmoil has kept gold trending around unchanged, it will be the FOMC statement out at 12:30 PM EST that really has the potential to rattle the markets.  Given that the market is already expecting dramatic remarks in regards to QE3 in the wake of last Friday’s job data, traders should be wary that anything less than a full-on commitment to quantitative easing has the capability to cause a short term sell off.