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Gold Eases Modestly Ahead of FOMC Statementby Peter A. Grant
Mar 20, AM 
Gold is modestly lower as the markets eagerly anticipate the FOMC statement, which comes out at 2:00 ET today. The Bernanke press conference is scheduled to begin at 2:30 ET.The Fed is widely expected to hold steady on rates. A slight tweak to the economic condition language is likely, given the recent drop in the jobless rate. However, Bernanke — either in the statement itself, or in his presser — will reiterate that the Fed will maintain its super-accommodative policy stance even if the economy starts showing signs of real improvement. Here we are, nearly six years after the Fed began cutting rates in advance of what eventually proved to be the biggest recession since the great depression, and there are no signs that the Fed is anywhere close to tightening. In fact, when you take some of the other G7 central banks into consideration, the bias is toward even easier policy. Astounding. The Parliament in Cyprus rejected the deposit levy and therefore rejected the EU bailout. However, that the little island nation was prepared to confiscate a portion of the deposits of its citizenry is proving to be somewhat of a watershed moment. Practically everyone who has called in to our firm this week has mentioned Cyprus. When confidence is eroded in the banking system and the government intentions with respect to people's savings...well, they start looking for alternatives. This risks an old-fashioned bank run once people in Cyprus regain access to their banks. Undoubtedly, some may look to stuff their euros under their mattress, but many too will look to an asset that has served as a store of wealth for thousands of years. Gold. 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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Wednesday March 20
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