Gold and silver get a boost from the Fed, Greece testing investor patience
Ben Bernanke has given gold and silver another big boost. In a question and answer assembly yesterday, he publicly analyzed his outlook for the U.S. economy in lieu of debt, unemployment, and the correlated crisis in Europe. Gold and silver prices surged as the Fed chairman spoke
Investors now wait with caution as Greece grind towards a deal on a rescue package that it urgently needs after missing a string of deadlines. Athens tested investor's patience yet again on Tuesday by postponing a decision on whether to accept austerity and reform measures in exchange for a 130 billion euro bailout from the IMF and EU.
Gold could face a short-term pullback if Greece strikes ideal, as it may hurt the appeal of safe-haven assets, but in the long run the lingering euro zone debt crisis is expected to support sentiment in gold."If Greece were to agree on everything right away, I don’t think it would solve everything because they will still have to implement the measures," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong."There are plenty of land mines left."
Friesen said the uncertainty in Europe and the shadow it casts on the global economy will buoy gold, as central banks around the world are expected to promote accommodative monetary policies to spur growth.
Silver is leading the precious metals complex with a 23-percentgain so far this year. Edward Meir, an analyst at INTL FCStone, said silver is facing heavy resistance around $35.70, near a previous high hit in late October."Should silver take out this level, we will be in a technical breakout stage, possibly setting the complex up for a push to the $40 mark," he wrote in a research note.
For more on gold and silver click on the links below;
Bernanke speaks, gold bugs rejoice! (Wealth wire)
The fed resumes printing (Safehaven)
Silver institute to release world silver survey (Commodity online)
PIMCO Leader Likes Oil, Gold over Stocks (IB times)
In the bullring with gold (Kitco)
Gold and silver remain the best investment against the damaging government deficits and central bank policies around the world. To find out how you can invest in bullion with GCIL call us on 01158 532900.