FED MEETING HAS METALS IN HOLDING PATTERN; U.K. DOUBLE DIP ALARMING
Precious metals prices remained relatively steady in overnight trading. The dollar experienced a bit of a slide that helped Gold hold steady. However, there seems to be a serious wait and see ahead of today’s Federal Open Market Committee meeting. BNP Paribas analyst Anne-Laure Tremblay said, “The Federal Open Market Committee announcement could be the trigger that takes Gold away from its trading range. … Any mention of the need for further monetary accommodation would, of course, be positive for the precious metal.”
The Federal Reserve’s meeting began yesterday, and many investors are anticipating Fed Chairman Ben Bernanke’s speech later this morning following the conclusion of the policy setting meeting. The overall feeling is that anyone hoping for further quantitative easing could be out of luck. However, there still is a feeling that Bernanke will do what he can to keep all options on the table. The Fed statement should be released around 12:30 p.m. (EDT), and a quarterly forecast is set for release at about 2 p.m. (EDT). Bernanke is scheduled to hold a news conference at 2:15 p.m. (EDT). Victor Li, an economics professor at Villanova, said, “There won’t be much to keep the Fed from their accommodative policies for the foreseeable future.”
Although not a member of the euro, the United Kingdom’s double dip recession is alarming to the European Union as a whole. England faces its own concerns revolving around quantitative easing. The slump in construction and decline in gross domestic product are not “supportive of the fiscal consolidation program, so the government is likely to be concerned about that. The data were bad, and that supports the view that the Bank of England will do a final 25 billion pounds of quantitative easing in May,” economist Philip Rush said. Chancellor of the Exchequer George Osborne said, “The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt.”
At 8:54 a.m. (EDT), the APMEX precious metals spot prices were:
- Gold - $1,640.90 - Down $3.40.
- Silver - $30.89 - Up $0.07.
- Platinum - $1,550.80 - Up $3.70.
- Palladium - $666.90 - Up $0.10.
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