Gold Comes To a Standstill Awaiting Fed Speech

September 3, 2012 - by buygold.co.uk · Filed Under Gold News Leave a Comment

The bullion market and bullion investors had a tough time as the range in which gold prices were stuck was pretty narrow and unstable. But this was anticipated considering what the bullion market was awaiting for.

There is a speech scheduled for this Friday, the 31st of August, from the chairman of the Federal Reserve, Ben Bernanke. This speech is of such high significance because a third round of quantitative support could be announced. This easing could be just the stimulus required to shore up the economic state and thereby increasing the gold prices also.

Second Quarter Improvement in Economy Bad News For Bullion Market

However, the announcement of easing cannot be guaranteed now that the market reports for the second quarter are out. The economy seems to be stabilizing slowly despite the slow markets and the reports state that there has been significant improvements in the figures for the month of July and the first couple of weeks of August. The growth is bad news for the bullion market, especially in this vulnerable state. If there is no easing from the Federal Reserve and the address proves to be a wet blanket, then gold fortunes will drop further extending the bad run of gold for a few more weeks.

Slight Increase in The Value

At 0228 GMT, gold value was at $1,656.44 per ounce, owing to the small buying by investors who chose to be bold rather than cautious. This was very near to the four and a half month high value of $1,676.45 that was seen on the 27th of August. This was due to the hope investors laid on the Federal Reserve to provide monetary easing that could boost the gold value.

Other Major Currencies Also Remain Ragebound

Investors were also cautious while investing on other major currencies and were cautious while investing on direction. This stalling was also in anticipation to Ben Bernanke’s speech that could literally turn the direction of the market. The only question is that how significant the effect of the speech will be on the market and will the changes be temporary or a major shift in the market.

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