FOMC/US$/gold
As the FOMC begins their 2 day meeting, the key focus I believe is whether they leave in the word “exceptionally” in describing the low levels of the fed funds rate that will exist for an “extended period.” With the economy still fragile and a long ways away from a normalized rate, we know they will stay low for awhile, it’s just a question of how low. In another indictment of Fed and US government policy and the direction of the US$, the Reserve Bank of India bought 200 tons of gold from the IMF, about half of all the gold the IMF announced they were going to sell in Sept. This increases India’s gold holdings by 55% and further diversifies their reserves. The RBA expectedly raised rates by 25 bps to 3.5% as they “gradually lessen the degree of monetary stimulus” now that the “risk of serious economic contraction has passed.”
November 3rd, 2009 at 9:14 am
Apparently the average price the RBI paid was $1,045/oz. Does this set the new floor for gold @ $1,045? Obviously no one knows, but just as selling a home can set the market price for other homes in the neighborhood, perhaps this sets the market for gold?
November 3rd, 2009 at 9:15 am
Then again, Central Banks have historically been terrible market timers when it comes to gold.
November 3rd, 2009 at 9:32 am
I heard on Financial Sense News Hour (10.31.2009 part 1 a 00:58 minute point) that for every trillion created with Quantitative Easing it will be reflected by a $4,000.00 an ounce in gold.
Health Care is on it’s way, the states have managed to wrack up a half trillion in debt and I’m sure Goldman’s Cap-and-Trade will be piled on.
And for reform? Well the last minutes of Frontline’s “Warning” made it clear that these 535 whores (save for a few like Ron Paul) are down on their knees doing whatever the lobbyist tell them to do.
November 3rd, 2009 at 9:40 am
@yankee19
The real question is…
Being a market-timer, does the RBI use a stop-loss to protect its investment?
November 3rd, 2009 at 10:06 am
emmanuel117 – that’s pretty funny… That’s a pretty position to get stopped out of, don’t you think?!?!?
November 3rd, 2009 at 10:54 am
Huge gold breakout today!
November 3rd, 2009 at 2:01 pm
[...] is a key word to watch, according to Miller Tabak equity strategist Peter Boockvar. The Fed’s last statement said rates would stay at “exceptionally low levels” and [...]