STIMULUS TALKS BOOST GOLD
The Gold price is rising for a third straight session as speculators anticipate additional monetary stimulus following the Dec. 11–12 Federal Reserve meeting. Many analysts are expecting the announcement of additional bond purchases to add to the unlimited mortgage backed security purchases program, also known as QE3, announced in September. Gold has experienced substantial gains following each subsequent round of QE, and the prospect of further government spending coupled with uncertainty over end-of-year fiscal cliff concerns are both positive catalysts for boosting the Gold price. Julian Phillips, founder of GoldForecaster.com, expects “very influential news this week to come from the [U.S. Federal Reserve] on more monetary stimulus. The clock is ticking on the fiscal cliff and debt ceiling.”
Even though stocks are climbing today, there is considerable worry over the impact of the fiscal cliff on the stock market. Shareholder panic could spur massive selloffs if a resolution is not reached in adequate time. Though the combination of tax increases and spending cuts are set to be phased in over time, it is important that the President reassures Wall Street by “delaying any cuts, on the theory that Congress will eventually vitiate some of them,” according to Washington Post columnist E.J. Dionne. Investors continue to hope for a speedy solution to the “cliff” so they can prepare their portfolio strategies for 2013. No one is quite sure what to expect with potential fiscal cliff outcomes. Rep. George Miller, D-California put it this way, “Let’s not pretend the markets fully understand the politicians, or the politicians fully understand the markets.”
At 1 p.m. (EST), the APMEX Precious Metals spot prices were:
- Gold, $1713.90, Up $8.40.
- Silver, $33.28, Up $0.17.
- Platinum, $1625.70, Up $17.70.
- Palladium, $704.30, Up $6.30.
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