Perpetual gold bulls liken Ben Bernanke, the US Federal Reserve Chairman, to one who delivered the bull market in gold with one hand and grabbed it back with the other; 2011 had seen gold futures rallying all the way to $1900 levels on QE steroids only to dip below the $1200 levels very recently.
Past two days had seen a slight uptrend in gold, marked by buying at lower levels and some short covering. However, hours before US Federal Reserve is about to come out with the minutes of the Federal Open Market Committee meet, which held in June, the futures are trading flat.
FOMC meeting minutes are scheduled to be released by 11.30 PM IST. This would be followed by a speech of Ben Bernanke sometime around 1.40 AM IST, Thursday.
Gold on the Globex platform of Comex for delivery on August 13 was seen trading at $1,245.05/oz, a loss of $0.85 or 0.07% as of 11.04 AM IST. Gold on India’s MCX for delivery on August 05 was seen trading at Rs.26008, almost flat.
It looks to be a wait-and-watch mode as far as gold investors are concerned.
Perpetual gold bulls liken Ben Bernanke, the US Federal Reserve Chairman, to one who delivered the bull market in gold with one hand and grabbed it back with the other; 2011 had seen gold futures rallying all the way to $1900 levels on QE steroids only to dip below the $1200 levels very recently.
The QE measures or Quantitative Easing measures—bond buying by Federal Reserve—had made gold rally to insane levels, and when June 2013 saw Bernanke announcing tapering of the measures provided the job market recovers, sent gold to a nadir.
It is the FOMC that takes a collective decision on whether or not to continue with the QE measures. It is worthwhile to note that positive job data that came in recently has taken the glitters off the eyes of QE advocates.
“The U.S. dollar is still rallying and Treasury yields are still trying to find a top. It’s still a pretty negative environment for gold.” said Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd. in Singapore to Bloomberg News.
Besides, the rout in the currencies of emerging markets has added to Dollar strength.
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