Investors Look To Euro Zone And China For Direction On Gold
August 8, 2012
By James O'Dell
Los Angeles, CA. – Morgan Gold - Gold and Silver bullion prices rose on Wednesday, in choppy trade with the price to buy Gold currently at $1,613.70 an ounce, and the price to buy Silver at $28.09 an ounce, as the euro lost ground to a modest advance in the dollar. Speculation that the Fed and the European Central Bank (ECB) may soon launch monetary stimulus continues to underpin the Gold price after three straight days of gains.
"Gold seems to be supported by hopes that Europe and the United States would launch more stimulus measures to help shore up their faltering economies," said Pradeep Unni, of Richcomm Global Services. "Investors are betting that the festering debt crisis in the euro zone could push the ECB to launch a new round of bond-buying soon."
After Fed President Rosengren's call for QE3 on Monday, Dallas Fed Bank President Fisher cautioned on Wednesday that there is already "adequate economic stimulus" in place and global central banks may not even have the capacity necessary for additional measures. “We’re at the risk of overburdening the central banks,” said Fisher during an interview with Tom Keene, on “Bloomberg Surveillance,” on Wednesday. “We keep applying what I call monetary Ritalin to the system. We all know there’s a risk of overprescribing.”
Meanwhile, Gold could end up without clear direction in August, as investors are already looking to the Fed's Jackson Hole symposium, on Aug. 31, when many look for Chairman Bernanke to announce a third round of quantitative easing. “We still maintain our position for the Fed to deliver on QE3 at its September meeting, pushing Gold, precious metals and base metals higher in general into Q4,” said TD Services.
“We may need to look toward China data due later this week for help with direction,” said Janet Mirasola, of R.J. O’Brien & Associates. “Results expected will be for CPI and PPI tonight, followed by industrial production, fixed-asset investment and retail sales on Thursday. Clues to the extent of the China slowdown are all important to global growth, especially to the base materials and commodity markets." Protect your wealth and your retirement, during these times of economic and geopolitical uncertainty, by investing in physical Gold and Silver bullion.
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