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.
With gold, silver and Uranium stocks being out of favor one must decide if this is a problem or an opportunity. We have steadfastly refused to buy gold and silver mining stocks for the last two years and as evidenced by the HUI we feel that our decision to hold back has been vindicated. The damage done to the mining sector may not be over yet but this demise is starting to offer up some exciting opportunities in my view.
Great care will be needed in the selection process in order to generate a reasonable profit and that’s where our new venture begins. ‘Stock Trader’ has begun trading on behalf of ourselves and our much valued subscribers, all exciting stuff which we are really looking forward to, if you wish to join us then please subscribe below;
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