Despite Janet Yellen’s latest suggestion that the U.S. Fed will complete its latest QE programme in October, gold has risen sharply in price this morning. What gives?
Author: Lawrence Williams
Posted: Thursday , 10 Jul 2014
LONDON (MINEWEB) -
Aren’t the markets fickle? Back last year the gold price crashed once it became clear that the U.S. Fed was looking to cut back its Quantitative Easing programme on fears that it was QE that had been supporting the gold price. It was quickly forgotten that the gold price had advanced strongly prior to the term Quantitative Easing even being coined – but the market – with its ultra short term viewpoint – seemed to have assumed that QE and the gold price were inextricably linked and marked the yellow metal down accordingly. This was perhaps prompted also by gold mega-bears like Goldman Sachs’ Jeffrey Currie calling for a fall to around the $1,000 level before the end of the current year. Now things could yet turn back again for gold and it is perhaps too soon to write off Currie’s and other bank analysts’ herd-like predictions as 5 months can be a long time in the gold market, particularly when those with huge pockets, and mega short positions, start to feel threatened. However the past month or two does seem to have seen something in terms of a positive turnaround in overall investor sentiment towards gold. ...