DEC 13 GOLD UPDATE
Gold and silver gave us another stomach churning ride this week:
- Gold broke below the rising long-term support line last week, bounced back above it early this week, only to fall below it once again
- Similarly to gold, silver showed strength but declined on Thursday
- Gold responded only to the upward moves in the USD Index
- Mining stocks unsuccessful attempt to move back above the long-term rising support line and the 2013 low
The long-term picture for precious metals seems to be less stressful thanks to the ZIRP (zero interest rate policy), which is here to stay even though recent official numbers of employed look very optimistic. We are still far from reaching Feds' thresholds for the labor market and inflation.
If you would like to know if gold investors are going to need more Maalox (or how much) next week, we invite you to read today's Premium Update.
Dec Market Overview: Tapering Is Not Tightening: Decomposition of Tapering
Tapering is not the same as tightening even though everyone seems to view these terms as synonyms. We had previously described tapering as highly unlikely, but the truth is that it was an oversimplification that we used to make a point about the possibility of monetary policy tightening without getting into details - which we do in the December Market Overview.
Some form of “tapering” may actually happen even though the Fed stays “easy like Sunday morning” in its approach to money printing, and… One form of tapering has already been seen in 2010!
The truth is that there's much more to the tapering issue than just the Quantitative Easing program simply because there are more tools that the Fed uses than the QE itself:
- Interest rates are kept very low for a significant amount of time
- Quantitative easing, which means money production for support of various assets, especially government bonds
- Easing in terms of qualitative aspects, that is the expansion of the Fed's balance sheet which has benefited not only government bonds, but also mortgage backed securities
One of the most important questions for gold investors regarding Fed's policy is what could be tapered and what's highly unlikely to be tapered. The even more important question is how it will impact gold market and your portfolio. Subscribe and read the latest Market Overview report.
Gold & silver trading
Trends that move before the market, overlooked by the masses. Clear buy & sell signals for gold & silver traders.Analyze charts
Gold investment tools
More than just a standard set of tools. Tools that set a new standard for gold investment & gold price prediction.Explore tools
- September 19, 2012, 11:23 AM
- August 31, 2012, 11:00 AM
- May 16, 2012, 6:24 PM
- May 16, 2012, 4:55 PM
- September 18, 2010, 12:00 PM
- December 30, 2009, 12:00 PM
free newsletter + 7 days trial
New Tool: True Seasonals
True Seasonals forecasts future performance of precious metals, stocks, ETFs, and other assets with a known accuracy based on recurring price patterns (a.k.a. seasonality) and the impact of derivatives.
Gold Market News
Delivered To Your Inbox
Free Of Charge
Bonus: A week of free access to Premium Service.
- December 13, 2013, 12:00 PM Can Gold Make Sense If the Dollar and the Euro Do Not Collapse?
- December 13, 2013, 6:35 AM 3 Signs of Gold's Upcoming Decline
- December 12, 2013, 12:00 PM What Can Happen with Gold If the Dollar and the Euro Collapse?