Failure in Quantitative Easing Pushes Gold Prices Down
Gold prices further fell when they were expected to rise this week, due to the failure of Ben Bernanke, the chairman of the Federal Reserve, to point out any sort of financial push in his congressional testimony. This implied that there would be no aid for recovery, which was widely predicted by investors.
Trading Remains between a Fixed Bracket
There has been no significant changes in the prices of arguably the most sought after precious metal in the world. The price remains between the range of $1,550 to $1,600 per troy ounce and has not changed since the past few months. This had raised some hopes among the investors that some sort of ‘quantitative easing’ will be injected by the Federal Reserve. But the failure of the chairman to give any sort of indication about a financial aid contributed to this drop in prices.
An analyst at the Standard Bank based in Johannesburg, Marc Ground, was of the opinion that all the analysts were confounded by the lack of action from the government. He said that traders and investors were expecting the monetary stimulus to be the highlight of his congressional testimony.
Gold Tumbles After Bernanke’s Statement
Gold had hit a high of $1,600 per toy ounce in some of the earlier trading activities but Bernanke’s statement was a negative influence on the prices. After his testimony, the prices went down by more than one percent. During the midday New York trading, gold was further down by 2%. The price at that time was $1,586.54.
Investors Losing Faith in Gold
A few months ago, gold was considered as the safest investment option by all the investors. But its recent run has forced them to reconsider their option and look for other investment avenues. This fact was highlighted by Credit Suisse’s precious metal analysis team member, Tom Kendall. He said that the yellow metal’s lackluster run is due to the deflationary pressures and the lack of stimulus from the government. He said that the decline of the Indian rupee has had a negative impact on the Indian buyers, who are among the world’s largest buyers of the gold.
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