Much of the outlook for the months ahead hinges squarely on what is said by Federal Reserve Chairman Ben Bernanke at the Jackson Hole Symposium on Friday, with many breathlessly hoping for the unveiling for another round of stimulus to underpin sagging growth. Faced with such a clear inflection point in the global macroeconomic landscape, a large crowd of investors have apparently taken to the sidelines, draining market liquidity and producing erratic price action that is subsequently difficult to explain.
Looking ahead, more of the same is likely until the Fed Chairman finally utters the words everyone has been waiting for and – whether stimulus is announced or not – allows the markets to digest what is to come in the months ahead, thereby finally expressing some directional conviction.
Gold and silver formed a pin-bar on the 4hr that has seen serious pullback taking out stops before finally looking bullish again. This may be some correction before the continued plunge or may be the end of the bigger correction and we may be heading back to the big round number 2000 for Gold.
In addition, there is a rumor that troubled European countries are going to sell gold in order to combat their debt. The gold held by Spain, Italy, Greece, Portugal and Ireland is far from covering their debt, but is yet another tool for balancing the finances.
ReplyDeleteThere are also talks that Greek gold will serve as collateral against future loans. None of these rumors are confirmed. In the past, China suggested that the US will sell gold in order balance its debt.