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Ringgit Technical Gauge Signals Currency Poised to Reverse Gains	20:01 Bloomberg - Markets
Dell buyout talks advance, Silver Lake lines up banks	20:00 The Business Standard
FOREX-Yen extends gains for second day, euro stung by Juncker	19:57 Reuters - Economy
Sierra Mining unlocking high grade copper/iron potential in the Philippines	19:51 Proactiveinvestors - Australia
Ford says U.S. may change hybrid fuel-economy test procedures	19:48 Automotive News - Global
BOJ cuts economic assessment of 8 of Japan's 9 regions	19:41 Business Times Online - Stock Markets
China says 2013 land price inflation to quicken	19:41 Business Times Online - Stock Markets
FORMER TREASURY OFFICIAL TWEETS: Here's Why A Debt Ceiling 'Prioritization' Would Be A Disaster	19:40 Business Insider - Finance
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In recession-hit Spain, hints of new competitiveness	19:33 South China Morning Post - Money
Gold Near Two-Week High on Stimulus Optimism; Platinum Declines	19:31 Bloomberg - Markets
Australian dollar extends gains at noon	19:27 Business Spectator
Forex: USD/JPY breaks 88.27 support; more downside opens up	19:26 FXstreet - Forex News
China FDI Shows Full-Year Decline as Economic Expansion Slows	19:25 Bloomberg
Dubai at its best: Shopping Festival fuels economic engine	19:23 Emirates 24/7 - Emirates
LDP’s Ishiba: weaker yen may trouble some industries (looks to be a rehash)	19:21 ForexLive.com
Outlook 2013: Gold's Bull Market Still Has Legs	19:20 The Motley Fool
Bank of England warns against risky bets on weak economy	19:17 Reuters.co.uk - Business & Finance
Dollar's rise slow but steady	19:16 WA Today - Markets
‘Good governance needed for economic growth’	19:11 The News International - Business
Rupee weakens	19:11 The News International - Business
Coventry Resources firms economic case for Canadian gold camp	19:11 Proactiveinvestors - Australia
FOREX: Ringgit Slipped Against US Dollar On Profit-Taking	19:10 Bernama - Malaysian National News Agency - Markets
Forex Flash: BoC to justify tightening bias in the short term - Capital Economics	19:06 FXstreet - Forex News
More on the World Bank’s cut to economic growth outlook	19:01 ForexLive.com

Gold Lifted as Bernanke Clarifies Fed Position

by Peter A. Grant

Jan 15, AM
(from USAGOLD.com) --

Gold has jumped to a new two-week high, shifting attention back to the high from three weeks ago at 1694.86. Keep in mind that the midpoint of the $400 range that has dominated for more than a year comes into play at 1721.61.

The yellow metal has been lifted by the recent unraveling of the notion that the FOMC suddenly turned more hawkish at their December meeting. You may recall that gold dropped rather precipitously two weeks ago with the release of minutes from that meeting, where "several members" favored a halt or cut to Fed accommodations as soon as this year. This was perceived as being a rather dramatic shift in sentiment, and yet apparently those members voted in favor of the shift in guidance that calls for a continuation of über-accommodative policy until the jobless rate falls to 6.5%. The lone dissenter remained Richmond's Jeffrey Lacker.

Yesterday, Fed chief Ben Bernanke made it quite clear that the Fed will keep its foot on the monetary gas pedal for some time to come. “There are some positives, but I want to be clear that while we’ve made some progress there is still quite a ways to go,” said the chairman. He reminded his audience of his belief that the overreaching lesson of the Great Depression is not to choke-off growth by letting monetary policy get too tight. This sentiment remains a feature of Fed policy statements, in the language that pledges the "highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens."

I doubt that the Fed will backtrack on the guidance targeting the unemployment rate at 6.5%. In fact, Minneapolis Fed's Kocherlakota is already advocating for a more aggressive 5.5% target rate. There have been a number of other dovish comments in recent days, that serve to counterbalance the December FOMC minutes. Some from members with dovish leanings, but some also from more centrist members.

With the Fed's position at least somewhat clarified, focus now shifts to the looming debt ceiling debate. President Obama vowed yesterday not to negotiate on the matter, while warning of the possibility of economic calamity and "haywire" markets. He bemoaned the “absolutist position" taken by some members of Congress back in the summer of 2011, while seemingly taking one of his own.

Fitch warned of a possible downgrade to the U.S. sovereign debt rating. David Riley of Fitch said, "We thought the 2011 crisis was a one-off event …. if we have a repeat we will place the U.S. rating under review." With both sides seemingly digging in their heels, this fight may actually end up being worse than the one seen in 2011, which culminated with gold achieving its all-time high of 1920.74.

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Gold Lifted as Bernanke Clarifies Fed Position