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Gold Firms Ahead of Central Bank Meetingsby Peter A. Grant
Apr 29, AM 
Gold begins the week on pretty firm footing, having retraced much of Friday's intraday retreat. The dominant story in the market continues to be the strong physical demand for gold that emerged as a result of the mid-month sell-off in the paper market.A weaker dollar is helping to underpin the gold market. The greenback has been pressured by a stronger euro after Italy successfully formed a new government over the weekend. The ECB meets this week and a recent worsening of the economic data have increased the likelihood of a 25bp rate cut. The Bank of Japan said reiterated its plan on Friday to "conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen." However, the market seems to have been hoping for more than the already stated plan to double the monetary base in two-years. The yen rallied, leaving the important 100.00 level against the dollar well protected. The Fed also meets this week and will announce policy on Wednesday. With the economy continuing to languish, the FOMC is widely expected to hold rates steady near 0% and continue buying $85 bln a month in assets. In light of the recent soft data and hints of deflationary pressures, talk of phased withdrawals of accommodations has diminished in recent weeks. 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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