Has the Fed Given Gold’s Safe Haven Appeal a New Lease on Life?
The latest FOMC statement puts currency debasement arguments squarely back on the table but, is this enough to win back investors after last year’s volatility.
by Geoff Candy, MineWeb.com:
GRONINGEN – The start of the new year brought with it a renewed level of optimism among gold bugs. But, while they were positive on the metal’s prospects they remained fairly circumspect after the metals 10% fall over the last quarter of the previous year.
This week, however, that optimism went from cautious to bubbly as the US Fed vowed to keep rates at ultra low levels.
According to Bloomberg, “Gold traders are bullish for a fourth consecutive week, betting that the Federal Reserve’s pledge to keep interest rates low until late 2014 will extend the metal’s best start to a year in more than three decades.
As UBS points out, “More accommodative policy is a very good foundation for gold to build on the next move higher. And as the Fed slowly becomes more open about the idea of further stimulus and as European QE remains a possibility, there are significant upside implications for gold.”
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