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Federal Reserve Announcements and the Gold Price

by jj167422

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Analysts explain the volatility of the 相場価格with its dependency on the US Federal Reserve financial policies in 2012. Recently, the US Federal Reserve has released data concerning increased employment rates in the US after 2011. These figures slightly exceeded the most optimistic expectations. Positive data related to slowly increasing employment rates are certain to influence the Federal Reserve's financial policies right now. Similarly, they will they influence the financial debates due in the final rounds of the US presidential campaign. Experts say the influence of these two processes will surely extend to the gold price (相場価格).


At first, the released Fed employment stats seem to contradict the Goldman Sachs predictions. But many analysts say things have to evolve. The positive data published do show a somewhat surprising recovery rate of the American economy, but this process is still slow. The global circumstances to which the Feds already answered with two rounds of quantitative easing are still in action in 2012. Analysts still expect the Federal Reserve to work at improving its balance sheet and at increasing liquidity and money supply, so a third round of quantitative easing (or a similar set of measures) is a reasonable expectation.


When making this positive announcement, the Fed also reiterated their intention of keeping interest rates extremely low until 2014. But the third round of easing was not mentioned for now, and gold sold off in result. After the $40/ oz. fall on March 14 (somewhat reminding of the $110/ oz. fall occurring abruptly in February in one day), 価格相場started recovering this week. It gained 1% on Monday and 4% on Tuesday, as compared to the week before. Monday saw gold at $1679/ oz. and Tuesday saw it at almost $1700/ oz.


The dollar lost ground on Monday. Monday was the day of a new Fed Chairman Ben Bernanke speech. Bernanke now interpreted the increasing US employment rate, described as encouraging but still far from comfortable. The need for "continued accommodative policies" mentioned in the speech was assumed in the markets as a sign for quantitative easing measures possibly coming up. If so, a new surge of liquidity in the market would probably trigger another increase of the gold price, as well as the fulfillment of Goldman Sachs analysts' predictions.

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