Fed Chief Ben Bernanke confirms that Federal intervention in the bond market is still an active and necessary strategy to move towards a full employment level. The take away from today’s Q&A with the House Budget Committee also gives traders no incentive to buy into the down gold market.
Although buying into a pullback is a fundamental strategy of trading, if Ben says that there will not be any near term inflation, then there won't be. Without inflation or even an inflation scare, gold prices have no reason to trend upward. People are not scared and gold is most useful as a hedge against lost investor confidence.
The Fed's aggressive QE2 strategic buyback of $600 billion in bonds through the first 2 quarters of 2011 promoted economic growth but no need to invest in gold until the training wheels are taken off.
If this topic is the Federal Reserve Board, it will work!
ReplyDelete