As expected, Janet Yellen and the Federal Reserve did not raise interest rates on Wednesday and the stock market responded accordingly.

The Dow Jones Industrial Average gained 164 points and the S&P 500 (SPX) gained 23.3 points.  The Nasdaq powered ahead by 54 points and the Russell 2000 (RUT) gained nearly 17 points.

The S&P 500 Trust Series ETF(SPY) - Get Report traded nearly 110 million shares. 

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But more importantly, this is a good time for investors to proceed with caution. The Fed seemed to acknowledge that the economy could be in for a decline.  Gold is a good investment at this time.

One of the more important statements from the Federal Reserve on Wednesday was that "near-term risks to the economic outlook have diminished" and that risks "appear roughly balanced."

This appears to be a subtle way of saying that growth continues to slow, and there well could be a recession in the future. Moreover, the Fed talks a tough game that it sees a rate increase coming but it cannot bring itself to raise interest rates. 

The Fed lowered its 2016 GDP forecast to 1.8%. That is pathetic.

In the short-term, the stock market would appear to move higher, but the longer-term trend continues to look bleak. There are many moving parts and it would be beneficial for traders and investors alike to tread carefully and and hold gold, gold miners, and cash.

If a recession is looming, this stock market could decline massively.  The market invariably adjusts to conditions.

The big asset class winner on Wednesday was gold and the gold miners.  The SPDR Gold Trust(GLD) - Get Report gained $1.83 or +1.46% and is higher by +25.44% in 2016.

The Daily Gold Miners Bull 3x(NUGT) - Get Report mentioned as a long position this past Monday, gained +20.58% on Wednesday and continues to be a solid position for us.  In 2016, (NUGT) is higher by +357% so far.

The NUGT price closed back over the 22-day moving average as you can see in the daily chart above.  This would appear to bode well for a continued move to the upside.

Gold and Gold Miners should continue to reward investors moving forward.  Silver is another asset that will continue to do well. Those investors who are not long metals should be. 

This article is commentary by an independent contributor.