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Gold price surge as Bernanke’s doves fly again
Published : February 27th, 2013
370 words - Reading time : 0 - 1 minutes
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24hGold - Gold price surge as ...Markets have been roiled over the last 48 hours by the three B’s: Berlusconi, Bernanke and Boehner. The indecisive Italian election outcome and the strength of the anti-austerity vote has many traders thinking that the whole eurozone issue is not receding in the rear-view mirror quite as quickly as some had hoped. EURUSD fell by more than two cents on Monday afternoon as news from Italy was digested. Stock markets also fell sharply, along with industrial commodities. In contrast, gold held onto its early-day gains.

Ben Bernanke therefore had an important task to do in his Congressional testimony yesterday: reassuring markets that, contrary to the head fake in the last batch of FOMC minutes, easy money policies will last for a long time to come yet.

He didn’t disappoint – noting “we [the FOMC] do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery… Inflation is currently subdued, and inflation expectations appear well anchored.” The money printing will continue he said until “substantial improvement” was seen in the labour market.

Gold and silver had their best day of the year in response to Bernanke’s comments, with gold gaining over $30 in a matter of minutes as the Fed chairman’s dovish words hit the airwaves; as ZeroHedge says, the yellow metal has had its best four-day trading run in six months. Silver gained around 80 cents, with a similarly impressive pop in copper. There’s been an air of unreality about the gold market in recent weeks, given the disconnect between the bullish fundamentals and the price action, but we could at last be seeing an end to this mismatch.

The final “B” is Boehner – that is John Boehner, current Speaker of the House of Representatives. Republicans and Democrats are still at loggerheads over the “sequester” budget cuts. Piddling cuts ($85bn this year) will take effect from Friday March 1 unless Congress and the president agree to kick the can down the road again. Chances are of course that they do the latter, but expect a bit more political grandstanding before then, though some DC insiders expect an agreement to be reached after the March 1 “deadline”.

Thanks to Goldmoney from www.goldmoney.com
Data and Statistics for these countries : Italy | All
Gold and Silver Prices for these countries : Italy | All
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