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GOLD MONTHLY PRICE

Or Prix Mensuel - Dollars US par once troy

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MoisPrixVariation en Pourcentage
déc. 2013 1 224,45 -
janv. 2014 1 244,27 1,62 %
févr. 2014 1 299,58 4,45 %
mars 2014 1 336,08 2,81 %
avr. 2014 1 298,45 -2,82 %
mai 2014 1 288,74 -0,75 %
 
 
 
 
 
déc. 2013 - mai 2014: 64,292 (5,25 %)
 
 
 

Description: Or (Royaume-Uni), 99,5% fin, cotation après-midi à Londres, moyenne des taux journaliers

Unité: Dollars US par once troy

 

 

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Gold and tapering fear 

After the significant drop in gold and silver prices in April and June, the precious metals spent July recovering. Even though geopolitical events have had an impact on prices the main milestone has been the FOMC meeting on 18 September.

After months of hints of tapering, that have affected the markets off and on, the Fed decided not to cut back on the current $85 billion monthly bond purchase plan. The reason behind the, to the media, unexpected move is that the Fed needs more evidence of lasting improvement in the economy.

Economists had forecast a reduction in the monthly Treasury purchases by $5 billion, to $40 billion, while maintaining its buying of mortgage-backed securities at $40 billion.

The Fed stressed that the pace of bond buying would be dependent on economic data, and there is no predetermined schedule for tapering the purchases. If economic data do indicate an improvement in growth and the labor market then that could lead to tapering next year.

We’ve discussed the issue of tapering in past articles. There is no effective way for the Fed to extract themself from the market by cutting stimulus or selling Treasuries. We saw evidence of this after the FOMC meeting in May when simply talks of tapering resulted in an increase in bond yields.

The yield on the 10-year Treasury note has climbed to 2.69 percent as of 24 September. That compares with 1.61 percent on May 1, and a record-low 1.38 percent in July 2012.

The Fed also reaffirmed that its target interest rate will remain near zero at least as long as unemployment exceeds 6.5 percent and so long as the outlook for inflation is no higher than 2.5 percent. Fed Chairman Bernanke added in his press conference that the first interest rate increase may not come until the jobless rate is considerably below 6.5 percent.

The effect on gold and silver prices immediately after the FOMC meeting was positive.

Gold initially moved up as displayed by the graph below.  

gold-tapering-fear.png
Source: Stockcharts.com

The initial move in gold was also followed by silver.

silver-tapering-fear.png
Source: Stockcharts.com

Much of the positive momentum built up during July and August has now lost steam though and the initial increase in prices following the meeting has to a large extent retraced - both for gold and silver.

The next move still remains uncertain but the bears definitely have an advantage from a technical stand point as both metals are in a downtrend. So there is risk of further downward movement unless they are able to consolidate and break through upward support.

What impact should the effects of tapering and the latest FOMC meeting have on your gold and silver accumulation strategy? None really.

The long-term picture has not changed and although it always feels nice to time a move in the market correctly, we all know how difficult this can be practically. It may make sense to await a further move, either up or down, in prices before committing, but looking back a few years from now you are probably going to regret not entering the market at all. Most likely, the current levels will have seemed like an excellent entry point in retrospect.   

As always, make sure that you scale in your purchases and don’t commit to heavily at one single time. 



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Commentaires (1)

SAID
  • 1. SAID | 06/07/2014
NICE VIDEO THANKS

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Date de dernière mise à jour : 06/07/2014