Record Gold Holdings Climb Awaiting Bernanke Speech
| by Michael Locklear
August 31, 2012 – Gold prices continue to enjoy record highs in the face of anxious anticipation of the big speech today from Federal Reserve Chairman Ben Bernanke at the Fed’s annual symposium in Jackson Hole, Wyoming. Exchange traded products advance to record highs yesterday as investors continue to speculate as to what the Bernanke speech will reveal about the Fed’s intentions regarding additional monetary easing.
Wednesday’s consumer confidence report revealed the largest drop in the last 10 months. The report adds fuel to the predictions that increase measures to shore up the economic growth in the United States will come from this week’s meeting of the Fed. Gold reached a near four-year high this week as hopes continue among options traders that the Fed will indicate a move toward additional supports in monetary policy.
Resources analyst David Lennox of Fat Prophets in Sydney, Australia has indicated that the primary reason that gold prices had not collapsed completely has been moves by investors to direct gold holdings in the exchange traded products instead of gold shares. Investor holdings in exchange traded products now polls 78.99 million ounces which puts their holdings slightly higher than the 78.83 million ounces currently held by Italy.
By bypassing Italy, investors now hold the third-largest cache with the United States and Germany holding the most according to information From the International Monetary Fund and Bloomberg. At $1671.30 an ounce gold for December delivery showed little movement on the COMEX in New York.
The precious metals market showed chart consolidation and more profit-taking as investors and traders continue their watch to see what Chairman Bernanke will say today in his long anticipated speech in Wyoming. His speech will now be the focal point of the meeting since the European Central Bank President Mario Draghi announced on Tuesday that he will not appear at the Fed symposium because he is too busy. He is obviously preparing for his own important revelation at the September 6 European Central Bank meeting.
Hope still remains high among investors and economy watchers that both the Federal Reserve and the European Union central bank will move to new actions on monetary stimulus. Precious metals and other markets are holding their breath as they await the outcome of these crucial meetings. Meanwhile Italy is moving to auction off some of its debt in what is hoped to be a successful move toward stabilizing their economy in light of the fact that the cost of borrowing is down. The finance Minister for Greece has indicated that his country is expected to soon reach final agreements on budget cuts. China is also announcing that its central bank is preparing to increase the liquidity of its banking system in its efforts to increase growth in its economy.
Related Posts
Gold Prices Remain Volatile While Investors Wait for Jobs Numbers
October 2, 2012 - Gold prices increase slightly today over yesterday’s closing. Gold prices reached an annual peak yesterday when the price went up to $1791.20, its highest price since last November. The spot price today is around $1775. News of a stronger euro against the weakening dollar and a little market apprehension over forthcoming U. S. Job market numbers on Friday has investors in a bit of a cautious… more
Gold Down Slightly Due To Profit Taking
Due to drops in the stock market in oil prices and a strengthening dollar, gold investors are selling off some holding and taking profits from recent record high prices. Gold yesterday reached its highest price since February 29 when it rose to $1779.50 per ounce. Shortly after the announcement that the Bank of Japan would join other central banks in initiating monetary easing policies and purchasing bonds in order to… more
Bulls Cautious, Gold Down Slightly
September 18, 2012 - As investors pause following Friday’s monetary easing announcement by the Federal Reserve and a record-breaking stock rally, Gold moved slightly down yesterday and today. The gold market is looking to where it might go next. Nonetheless bulls still remain confident that the price of gold will just continue to climb into the near future. With the stock market rising along with a stronger dollar, gold prices… more
Fed Announcement Has Gold Down Slightly And Stock Markets Rallying
September 17,2012 - Gold prices are down slightly today after Friday’s rally. The current spot gold price is $1767, dropping slightly after Friday’s slight increase in last week’s overall 2% gain. The stock market rallied after Bernanke’s press conference on Friday where he laid out the current monetary easing actions known as Quantitative Easing 3. Standard & Poor’s 500 was up 23.43 points, reaching its highest level since years end 2007,… more