Gold price surge as Bernanke’s doves fly again

IMG Auteur
 
Published : February 27th, 2013
370 words - Reading time : 0 - 1 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Market Analysis

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”.

Data and Statistics for these countries : Italy | All
Gold and Silver Prices for these countries : Italy | All
<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
The Fed Is Confused about What Drives Inflation
18 Octneville
Hi Frank, Thanks for your article.......The fact of the matter is that LIES LIKE EVERYTHING ELSE DRIVES INFLATION , which as it so happens is 'THE'...
What kind of person runs for public office ?
17 OctThemis1
I liked the use of the self-actualization chart within the context of politicians and their motives. It probably applies to many in Hollywood as w...
The Silliness of the Bretton Woods Years
16 OctThe Recusant
KUDOS! The book is anti-gold slanted throughout and subtly mocks those that value gold as seen in that silly Las Vegas Golden Rooster tale. As I pr...
The Future (Not)
14 OctS W.-1
I have it on good authority that the Aliens living in Antarctica have discovered a way of turning Ice into Oil. All we have to do to secure ou...
Betrayal!
09 OctThemis1
I agree 100% with all the points you made. You have summarized my own anger and the reasons for it. My only consolation is that I believe the eli...
A silver price-suppression theory gets debunked
07 OctDoom-1
I think he linked the wrong article, because there's minimal facts and logic there relevant to price suppression. It's a shame, because I really wo...
Light It Up
07 OctThemis
I keep wondering whether the US is fermenting a war with North Korea so as to indirectly draw China in and delay implementation of the yuan-for-oil...
One Nation Under Gold (2017), by James Ledbetter
05 OctThe Recusant1
Sadly, I too hoped for a more even-handed assessment of gold in our economic history. The book IS biased and by the time I got to the 20th century ...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS