tag:blogger.com,1999:blog-991324269440587462024-02-07T14:15:38.599+08:00Malaysia Gold InvestmentGold | Online Gold Trading | Gold Investment | Malaysia Gold Investment | Daily Metal Commentary | Daily Gold Report | Commodities Research | Gold Market Watch | Gold Coin | US Gold | Daily Gold Price | US Gold Investment | Gold ira | Gold Online TradingUnknownnoreply@blogger.comBlogger9125tag:blogger.com,1999:blog-99132426944058746.post-82814065374374653822012-09-14T08:01:00.001+08:002012-09-14T08:01:29.111+08:00QE3 will be at a pace of $40 billion per month until such time as the U.S. labor market “improves substantially.”<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-uIotP0sdbuA/UFJzvxZvyrI/AAAAAAAAH70/hebEY7srOi0/s1600/QE3-3.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="260" src="http://3.bp.blogspot.com/-uIotP0sdbuA/UFJzvxZvyrI/AAAAAAAAH70/hebEY7srOi0/s400/QE3-3.jpg" width="400" /></a></div>
The Federal Reserve delivered a particularly dovish statement at its
FOMC meeting on Thursday, as it announced an open-ended third round of
quantitative easing (QE3) and extended the timeframe for its near-zero
interest rate policy through at least mid-2015.<br />
<br />
The size and structure of QE3 will be at a pace of $40 billion per
month until such time as the U.S. labor market “improves
substantially.” Additionally, instead of purchasing U.S. Treasuries,
this time Ben Bernanke and his fellow central bankers bill buy
mortgage-backed securities.<br />
“The Committee is concerned that, without further policy
accommodation, economic growth might not be strong enough to generate
sustained improvement in labor market conditions,” the Fed<a href="http://www.federalreserve.gov/newsevents/press/monetary/20120913a.htm" target="_blank" title="U.S. monetary policy"></a> noted. “Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.”<br />
<br />
The Federal Reserve went on to say that “If the outlook for the labor
market does not improve substantially, the Committee will continue its
purchases of agency mortgage-backed securities, undertake additional
asset purchases, and employ its other policy tools as appropriate until
such improvement is achieved in a context of price stability.”<br />
<br />
The initial reaction in the markets to the Fed’s decision included the following:<br />
<br />
- Gold futures jumped $40.80, or 2.4%, to $1,774.50 per ounce – its highest level since February 28th of this year<br />
- The U.S. Dollar Index fell only modestly, by 0.2% to 79.557<br />
- The S&P 500 Index climbed 1.1% to 1,452.41 – its highest level since December 2007<br />
- U.S. government bonds sold-off sharply, with the yield on the U.S. ten-year treasury note rising 200 basis points to 1.78%<br />
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-99132426944058746.post-52034172769388439382012-09-13T08:11:00.001+08:002012-09-13T08:11:40.970+08:00The primary beneficiaries of a third round of quantitative easing (QE3)<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-3_Ug9Z63PIg/UFEklH0NdnI/AAAAAAAAH58/m8W2pWy2Oio/s1600/money-house.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="211" src="http://2.bp.blogspot.com/-3_Ug9Z63PIg/UFEklH0NdnI/AAAAAAAAH58/m8W2pWy2Oio/s320/money-house.jpg" width="320" /></a></div>
The primary beneficiaries of a third round of quantitative easing
(QE3) by the Federal Reserve would be “money substitutes and
Treasuries,” according to analysts at Citigroup.<br />
<br />
In a note to clients – which posted – Citigroup argued that the positive impact from QE3 on the
broader financial markets would be significantly less than from the
prior rounds of money printing.<br />
“There are several major differences between QE3 now and past QE,”
the firm began. “The one that is least remarked on is that the world
outside the US is much less attractive now than in March 2009 or August
2010 when previous QEs were announced. In earlier QEs, EM was much more
attractive, having shrugged off the debt crisis, there was an attractive
destination for the liquidity the Fed was injecting into the global
economy. Now the term ‘global leadership’ is linked to the US with its
2% (plus or minus) growth rate, and pessimism over Chinese, Brazilian,
Indian and other major EM economies. So the downside risk is that the
new liquidity sloshes around the banking system rather than being used
for investment abroad.”<br />
<br />
Citigroup went on to say that “We are struck by the somewhat
skeptical reaction of investors and colleagues to the Fed’s analysis of
the benefits from past rounds of QE. In particular the Fed’s benefit
calculation explicitly assumes that the level of stimulus is a function
of the size of the Fed’s balance sheet, so keeping the Fed’s balance
sheet fixed would not result in any diminution of stimulus.”<br />
As a result, if the Fed were to not announce any expansion to its
balance sheet, “Most clients and traders feel that rates would back up
significantly,” the firm noted. “In that world, subsequent rounds of QE
just keep rates where they are rather than lower them and the
cumulative benefits are much less pronounced.”<br />
<br />
Therefore, “There is a strong view in markets that 1) the Fed have to
do a big QE, given the expectations that have been built up, and 2) the
added liquidity will have a marginal effect.”<br />
Citigroup concluded by asserting that “This raises the risk that the
assets that will benefit are those sensitive to liquidity, such as money
substitutes and Treasuries, rather than assets that are sensitive to
real business cycle expansion.”<br />
<br />
Although the firm did not explicitly mention gold, thousands of years
of history suggest that the yellow metal is the asset which best fits
the description of a “money substitute.”Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-99132426944058746.post-36637477878530222022012-09-11T07:48:00.000+08:002012-09-11T07:48:06.791+08:00Gold price rally has been driven mainly by hopes that central banks will implement QE3<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-ARwQ7WSyieY/UE57uHk_wEI/AAAAAAAAH2k/jfNcS4u0tes/s1600/gold_QE3-300x250.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-ARwQ7WSyieY/UE57uHk_wEI/AAAAAAAAH2k/jfNcS4u0tes/s1600/gold_QE3-300x250.jpg" /></a></div>
The price of gold fell slightly on Monday amid profit-taking following three straight weekly advances. The spot gold price<a href="http://www.goldalert.com/" target="_self" title="precious metals inch lower"></a>
dipped $6.30, or 0.4%, to $1,730.80 per ounce in morning trading, after
reaching a six-month high of $1,745.32 last Friday. Today’s modest
weakness in gold prices coincided with a small rise in the U.S. dollar,
which had dropped to a four-month low last week against a basket of
foreign currencies.<br />
<br />
Looking ahead, investors will soon find out if Fed Chairman Ben
Bernanke and the FOMC will announce QE3 at this Thursday’s Fed meeting.
Across the Atlantic, on Wednesday the German Federal Constitutional
Court will rule on the viability of the European Stability Mechanism
(ESM) – the proposed permanent financial assistance program aimed at
combating the euro zone sovereign debt crisis.<br />
<br />
Commenting on the outlook for the price of gold, Barclays Capital
wrote in a report to clients that “Our economists now expect the Fed to
ease further at this week’s FOMC meeting, providing gold the catalyst it
requires to test fresh highs for this year over the coming weeks.”<br />
Analysts at Commerzbank echoed that sentiment, noting that “The
latest price rally has been driven mainly by hopes that central banks
will implement monetary easing measures…[QE3] is likely to spark higher
inflation in the medium to long term [and] lead to fears of depreciation
of key trading currencies.”<br />
<br />
“This should benefit gold as a store of value and as an alternative
currency,” Commerzbank added. “We are therefore convinced that the gold
price will continue to climb.”<br />
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-99132426944058746.post-51000247293455035892012-08-28T07:50:00.001+08:002012-08-28T07:50:32.842+08:00(QE3) could be forthcoming in the months ahead.<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-X3VB-LM0jzs/UDwHlVJzQ2I/AAAAAAAAHrg/cNDpW28J2fM/s1600/QE3.jpeg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="265" src="http://3.bp.blogspot.com/-X3VB-LM0jzs/UDwHlVJzQ2I/AAAAAAAAHrg/cNDpW28J2fM/s320/QE3.jpeg" width="320" /></a></div>
The gold price stabilized near $1,672 per ounce on Monday amid a relatively quiet start to the week this morning. Gold prices<a href="http://www.goldalert.com/" target="_self" title="precious metals steady"></a>
held in a range between $1,670 and $1,680 in overnight trading while
the U.S. Dollar Index traded near the flatline at 81.570. Today’s
consolidation in the price of gold followed last week’s 3.3% advance
that sent the yellow metal to its highest level since mid April.<br />
<br />
The recent strength in the gold price was driven in large part by
rising expectations of further monetary stimulus. Last week, the latest
Fed minutes – as well as a letter by Ben Bernanke to Congressman
Darrell Issa – provided a dovish tone indicating that a third round of
quantitative easing (QE3) could be forthcoming in the months ahead.<br />
<br />
Those developments arrived ahead of ahead of the Fed’s Economic
Symposium in Jackson Hole, Wyoming later this week. There, Fed Chairman
Ben Bernanke and European Central Bank (ECB) President Mario Draghi
will each deliver speeches on the state of their respective economies.<br />
As for the gold market, sentiment has improved in recent weeks, but
remains relatively muted. The most recent weekly Commitment of Traders
(COT) report showed that speculators raised their net long positions in
gold futures and options for the week ended August 21 to 140,126 lots –
the highest since early May.<br />
<br />
However, analysts at Standard Bank cautioned that “Despite the
improvement, overall gold positioning remains weak … leaving the metal
vulnerable to temporary sell-offs. With market hopes pinned on
Bernanke’s speech this Friday, the threat this week is particularly
acute.”<br />
The firm went on to say that “This week’s conference is not the forum
for Bernanke to make any strong commitment to easing. Therefore, as
usual, the market’s reaction will be largely based on reading between
the lines – leaving room for all manner of interpretations and
short-term reactions.”<br />
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-99132426944058746.post-91449653402179627432012-08-13T08:03:00.000+08:002012-08-13T08:03:09.354+08:00We’re going to get it (QE)<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-zl7PhrZA_n4/UChECUy1WFI/AAAAAAAAHf4/I0Ab2fUa_pI/s1600/ramezani20110805174909090.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="213" src="http://4.bp.blogspot.com/-zl7PhrZA_n4/UChECUy1WFI/AAAAAAAAHf4/I0Ab2fUa_pI/s320/ramezani20110805174909090.jpg" width="320" /></a></div>
The gold price turned modestly higher on Friday as the U.S. dollar
relinquished its earlier gains against a basket of foreign currencies.
The spot price of gold<a href="http://www.goldalert.com/" target="_self" title="yellow metal steady"></a>
fell to as low as $1,606.87 per ounce in overnight trading, but later
climbed to $1,629.65 – representing a gain of $11.49, or 0.7%. With
today’s gain, the gold price looked to close at its highest level since
May 7th.<br />
<br />
Peter Schiff, head of Euro Pacific Capital and a long-time gold bull,
discussed his latest thoughts on the gold price in an interview this
week with King World News. “I think that what’s going on is that most
mainstream investors, who invest other people’s money, see gold as a
bubble and are waiting for it to burst,” Schiff contended. “People
think the price of gold is going to go down. They think the Fed is done
easing.”<br />
<br />
“Everybody is waiting for the other shoe to drop for the price of
gold,” Schiff added. “If you look at the price of gold stocks, p/e
multiples, the assumption must be that earnings are going to fall
sharply. That’s based on the idea that gold prices are going to go
down.”<br />
<br />
Schiff went on to poke holes in that argument, predicting instead
that central banks will continue to flood the global economy with
unprecedented amounts of monetary stimulus. The Federal Reserve is
“Going to to keep on ‘fixing’ us with more and more damaging doses of
QE. We’re going to get it (QE). The Fed knows it’s coming, it just
doesn’t want to admit how weak the economy is.”<br />
<br />
“The minute QE goes away and interest rates rise, the party is over,
the whole thing collapses,” Schiff continued. “The Fed knows that. So
they have to look for more excuses to keep supplying more QE, and keep
interest rates at zero…So we know we’re going to have an endless stream
of quantitative easing. We’re going to have more QE’s than Rocky
movies.”<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-99132426944058746.post-40219755165741165522012-06-09T11:53:00.000+08:002012-06-09T11:53:45.307+08:00In the end, intensive money printing will be the order of the day<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-HsWnZ_643W0/T9LIB4OkMdI/AAAAAAAAGjM/Xjpfn0kZ0Gs/s1600/Forex_Exchange.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="302" src="http://2.bp.blogspot.com/-HsWnZ_643W0/T9LIB4OkMdI/AAAAAAAAGjM/Xjpfn0kZ0Gs/s320/Forex_Exchange.jpg" width="320" /></a></div>
“The guardians and architects of the European Monetary Union have
shown a complete lack of understanding of the fix they have created for
themselves, as they are trapped inside a structure that absolutely
cannot work under its current setup. However, they refuse either to
admit defeat or to ensure victory. As a result, the world continues to
be caught in a no-man’s land where Europe is full of potential live
financial hand grenades, and yet the ECB is hesitant to use the
preferred method for disarming them, i.e., the printing press.”<br />
<br />
That is Bill Fleckenstein’s take on the current state of the European sovereign debt ciris. In his latest weekly column for MSN Money<a href="http://money.msn.com/bill-fleckenstein/post.aspx?post=19ad0f94-03ea-46e4-bfbb-f7377f375d02" target="_blank" title="debt crisis commentary"></a>,
Fleckenstein argued that euro zone officials remain far behind their
counterparts in the U.S., U.K., and Japan with regard to their policy
response to the financial crisis.<br />
“Obviously, variations of this scenario have been at the root of the
European financial psychodrama for going on two years now,” he added.
“That will continue to be the case until either the euro totally
fractures amid some sort of unimaginable chaos or the European Central
Bank becomes extremely bold in its money printing.”<br />
<br />
Fleckenstein – one of the more prominent long-time gold bulls – later
stated that “In the end, intensive money printing will be the order of
the day, but there is no way to determine ahead of time how bad the
crisis is liable to get first, as measured by which markets might be
pummeled the most. It is simply unknowable…But, as I have just noted,
using the U.K., Japan and the U.S. as examples, any fool can see that,
in the current environment, a powerful printing press creates an oasis
of calm, if only temporarily.”Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-99132426944058746.post-34298548181759451302012-06-08T07:48:00.002+08:002012-06-08T07:48:43.053+08:00Gold price turned sharply lower after Bernanke Offers No QE3 Signals<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-44W-Dalct1Q/T9E9QYcjhVI/AAAAAAAAGhk/HAUvz6jDcQk/s1600/090303_85199185_resized.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="224" src="http://1.bp.blogspot.com/-44W-Dalct1Q/T9E9QYcjhVI/AAAAAAAAGhk/HAUvz6jDcQk/s320/090303_85199185_resized.jpg" width="320" /></a></div>
The gold price turned sharply lower Thursday morning after Federal
Reserve Chairman Ben Bernanke did not hint at further monetary stimulus
in prepared remarks to the United States Congress. In overnight
trading, the spot price of gold<a href="http://www.goldalert.com/" target="_self" title="yellow metal declines"></a>
held firm near $1,630 per ounce after China’s central bank unexpectedly
lowered its benchmark interest rate by 25 basis points in an attempt to
support its slowing economy. However, after the release of Bernanke’s
testimony, the gold price fell $14.31, or 0.9%, to $1,605.49 per ounce.<br />
<br />
n his first public comments since the post-FOMC press conference on
April 25, Ben Bernanke discussed the escalating headwinds facing the
U.S. economy before the Joint Economic Committee of Congress. Although
economic growth “has continued at a moderate rate so far this year,” the
Fed Chairman noted that “some of the factors that have restrained the
recovery persist.”<br />
<br />
“Notably, households and businesses still appear quite cautious about
the economy,” Bernanke continued. “For example, according to surveys,
households continue to rate their income prospects as relatively poor
and do not expect economic conditions to improve significantly.
Similarly, concerns about developments in Europe, U.S. fiscal policy,
and the strength and sustainability of the recovery have left some firms
hesitant to expand capacity.”<br />
<br />
As for monetary policy, “Helicopter Ben” primarily discussed the
current set of measures in place. The one comment with a slightly more
dovish tone occurred when he stated that “the situation in Europe poses
significant risks to the U.S. financial system and economy and must be
monitored closely. As always, the Federal Reserve remains prepared to
take action as needed to protect the U.S. financial system and economy
in the event that financial stresses escalate.”<br />
<br />
Given the lack of signals that the Fed is considering further
monetary easing – such as via a third round of quantitative easing (QE3)
– the price of gold gave back a considerable portion of its recent
gains. Looking ahead, analysts at ScotiaMocatta wrote in a note to
clients that “Gold closed slightly higher (on Wednesday) but failed to
hold its highs of the day or to clear resistance from the downtrend at
$1,632…We remain bullish so long as gold stays above $1,600, but will
need to clear resistance to bring in more buyers.”<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-99132426944058746.post-26273684330117122402011-06-11T08:42:00.002+08:002011-06-11T08:47:34.494+08:00Federal Reserve is unlikely to launch a third round of quantitative easing, QE3<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/-3-Zn_HTqHL4/TfK7FjThV5I/AAAAAAAAEP4/DTC5yeFgqzU/s1600/gold_price_holds_dollar_rally_stalls.jpg"><img style="float: left; margin: 0pt 10px 10px 0pt; cursor: pointer; width: 175px; height: 175px;" src="http://4.bp.blogspot.com/-3-Zn_HTqHL4/TfK7FjThV5I/AAAAAAAAEP4/DTC5yeFgqzU/s400/gold_price_holds_dollar_rally_stalls.jpg" alt="" id="BLOGGER_PHOTO_ID_5616757389335287698" border="0" /></a>The Federal Reserve is unlikely to launch a third round of quantitative easing, QE3, in the near future, according to noted hedge fund manager David Tepper. <p>In an email to CNBC, Tepper – the head of Appaloosa Management – wrote that “If (the S&P 500 falls) a couple hundred points and financial conditions tightened maybe they (the Fed) would reconsider. But there is no logic to QE3 now and the only result might be more food and energy inflation.”</p> <p>Tepper gained notoriety by investing in financial stocks in 2009 and posting one of the top returns in the hedge fund industry that year. In September 2010, he reiterated his bullish outlook on the markets in a CNBC interview, saying that equities were in a win-win situation: an improvement in the economy would lead to a rally, or a worsening economy would lead the Fed to launch QE2.</p> <p>Following his bullish call, the S&P 500 advanced over 25%, fueled in large part by the Fed’s second round of quantitative easing.</p> <p>Currently, although the broader market has fallen over 6% since its April 29 peak, Tepper contended that there has not been “enough of a drop” to cause Chairman Bernanke and the Fed to reignite the printing presses.</p> <p>Accordingly, he said he expects the weakness in the broader markets to continue. ”We (are) in a difficult investment environment,” he asserted. “Short and Sweet.”</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-99132426944058746.post-83344522236525517432011-06-02T08:01:00.003+08:002011-06-02T08:05:30.375+08:00QE3 Speculation Will Drives Gold Price Higher<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/-qz6fmRZEMbc/TebTOWmrVVI/AAAAAAAAEMw/vZI5P4asTSM/s1600/bernanke.jpg"><img style="float: left; margin: 0pt 10px 10px 0pt; cursor: pointer; width: 400px; height: 253px;" src="http://1.bp.blogspot.com/-qz6fmRZEMbc/TebTOWmrVVI/AAAAAAAAEMw/vZI5P4asTSM/s400/bernanke.jpg" alt="" id="BLOGGER_PHOTO_ID_5613406229103334738" border="0" /></a><br /><p>After dropping as low as $1,529 per ounce early yesterday morning, the gold price rallied above $1,550 per ounce as speculation of “QE3” made the rounds across trading desks. With the weak ADP employment data, expectations are that Friday’s jobs report from the Labor Department will miss estimates. QE3 speculation will drives Gold price higher.</p> <p>With QE2 ending on June 30, speculation is rising that Chairman Bernanke will engage in a new round of asset purchases – or money printing – if the economic data continues to deteriorate.</p>Unknownnoreply@blogger.com0