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« Junior Gold Mining Sector: From Distress To Misery For Investors | Main | Permanent brain drain and other perils of the junior downturn »
Wednesday
Jun192013

Ben Bernanke Mentions Tapering and Gold Prices Are Floored

 Chart courtesy of Kitco.com

As expected the Chairman of the Federal Reserve Board, Ben Bernanke mentioned that word ’tapering’ in reference to the bond buying programme towards the end of this year, given that certain economic conditions are met.

The result was that gold and silver prices dropped, with gold touching the $1350/oz level, the US Dollar jumped and the DOW lost around 200 points.

Precious metals investors need to tread carefully at this juncture as this sector is unloved at the moment and the possibility of QE being ‘tapered’ suggests that the continued inflation of the money supply is about to slow and maybe come to an end sometime in the not too distant future.

Whether this is sabre rattling or not, it does raise a question about the future of QE.

We will allow the dust to settle and re-assess the situation.

Take care. 

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Reader Comments (3)

Gold at $1329 and looking very weak, could be another bad day tomorrow.

June 20, 2013 | Registered CommenterGold Prices

Look at what's happening when it's just "MAYBE we'll cut back."

Bond yields are spiking. A little more and EVERY bond the Fed has bought with newly conjured clownbucks over the last 4 years will be under water. The mortgage market will be tasered. The stock market will get poleaxed.

This is pure bluff.

Consider this analogy for a moment. You check the flag outside to see how hard the wind's blowing. It's fluttering pretty steadily. You declare the breeze is fairly strong. Never mind the huge industrial fan you placed next to the flag to get it to wave.

Take away the fan and the flag will hang limp. That's the reality. And the markets know it. And that means, no "taper" and even more QE to come. SO...any reaction predicated on the idea that QE is going away completely off base. The wind ain't blowin'.

June 20, 2013 | Unregistered Commenterfallingman

Its all about perception, any mention of tapering will give the markets the jitters, however, I dont think that they have an exit plan, so its going to be difficult.

June 21, 2013 | Registered CommenterGold Prices

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