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Expectations of Further Central Bank Activism Keeps Gold Underpinnedby Peter A. Grant
Nov 16, AM 
Gold tested the downside again in overseas trading on Friday, but continues to hold above $1700. The yellow metal is being underpinned by expectations of further central bank accommodations, ongoing worries over the U.S. fiscal cliff and and impending battle over the need to raise the debt ceiling once again, as well as the persistent eurozone debt crisis.This morning's U.S. industrial production miss, on the heels of yesterday's large rise in initial jobless claims, may provide the incentive the Fed needs to relaunch outright Treasury purchases. Industrial production fell 0.4% in October, on expectations of +0.2%. Initial jobless claims surged 78,000 last week, putting total claims for the week well above expectations at 439,000. Pimco's Mohamed El-Erian suggested yesterday in an FT op-ed that the Fed would act "soon." Since announcing QE3 back in September, with heightened emphasis on jobs and the housing market, there have been mounting expectations that the Fed would likely have to do more. Fed chairman Bernanke said yesterday that while the housing market has shown improvement, it is "far from being out of the woods." And if they really want to see "substantial improvement in the labor market," widely perceived to be a decline in the jobless rate to 7% or less, the foot isn't coming off the monetary gas pedal any time soon. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.
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