Gold And Silver Rally As Investors Look Ahead To Jackson Hole
August 16, 2012
By James O'Dell
Los Angeles, CA. – Morgan Gold - Gold and Silver bullion prices rallied on Thursday, pushing the price to buy Gold to $1,616.00 an ounce, and the price to buy Silver to $28.21 an ounce, as the dollar lost ground to the euro after U.S. initial jobless claims came in above analysts expectations at 363,000 against an upwardly revised 364,000 in the previous week. Also adding pressure to the dollar, thus bolstering Gold, was a report that U.S. housing starts fell to 746,000 in July, well below the expected 753,000 starts that analysts were looking for.
At the moment, markets appear to be on hold until the Jackson Hole Symposium of central bankers, due at the end of August. At that time Fed Chairman Bernanke and friends may drop some hints as to the future of monetary easing. Two years ago the cozy gathering proved to be the start of the second round of quantitative easing (QE2). This year, analysts are indicating that there will be only two determining factors to the Fed's launching more stimulus, inflation and employment.
With recent data showing inflation to be relatively stable, if not declining, but nonetheless very near the Fed's 2 percent target, this would point to easing by the Fed, but there is really nothing in the price data to push the Fed strongly in either direction. That would leave the upcoming August jobs report as an important determining factor in the Fed's actions. That report will be released just prior to the next Federal Open Market Committee (FOMC) meeting in mid-September.
If the jobs report shows reasonable job gains, that would lessen the likelihood of the Fed doing more, but should the report reveal a drop in new jobs, the chances increase that the Fed will, in fact, add stimulus to the economy."My general view is that for the time being major central banks will let go of the mandate of price stability in favor of spurring growth figures," said Bayram Dincer, of LGT Capital Management.
"This means that the central banks in an explicit or implicit inflation targeting regime will try to anchor inflation expectations around 3.0 percent," he said. "This change would be Gold price supportive." 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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