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Gold Regains $1400 as Bernanke Testifiesby Peter A. Grant
May 22, AM 
Gold is higher in advance of Fed Chairman Bernanke's testimony on The Hill before the JEC. The yellow metal began to firm intraday on Tuesday after FedSpeak from a couple sources tempered expectations that the Fed would be scaling back on accommodations sooner rather than later.James Bullard of the St. Louis Fed and William Dudley of the New York Fed, a hawk and a dove respectively, both indicated yesterday that continuation of the Fed's QE program was appropriate given continued tepid growth and the absence of inflation, at least as reflected by CPI and PCE. Gains in the gold market mounted overseas on the realization that if Bullard is in favor of the status quo, Bernanke is unlikely to stray from the well established conditional policy mantra. In fact Bernanke hasn't changed his tune at all, even as the labor market showed signs of improvement, saying "It’s far too early to declare victory." I therefore have watched with some level of befuddlement as the market consistently gave greater credence to the hawkish musings of a couple regional Fed presidents. The WSJ's Jon Hilsenrath, who is widely perceived to be the Fed's mouthpiece in the press, reported last week that the Fed is "not there yet," with regard to scaling back QE. Additionally, as I suggested in yesterday's DMR, Bernanke's own legacy may well be factoring into policy decisions under the assumption that he'll be stepping down next year. While I'd like to believe the Fed chairman will always execute monetary policy based on what he believes to be appropriate, this late in the game, he might be looking to just hold it all together for the remainder of his term. Given everything that Bernanke has written and said about early withdrawal of accommodations, not heeding his own advice could reduce him to a punchline in history books. 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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