The gold has been falling because the investors do not see any oportunity in «disaster insurance»,
Ben Bernanke said in july this year. What will Ben Bernanke say this week? The gold prices are falling, because investors are not so concerned about the extreme outcomes anymore.
A stronger dollar will diminish gold demand. Once the tapering is known, investors expect a fresh selling wave. In addition, if the inflation keeps low the gold prices will continue its decline and probably below $1000 an unce.
Goldman Sachs target for gold is $1050 for 2014, and gold futures haven`t traded below $1000 since 2009. Credit Suisse expected the gold to decline below $1000 an unce in may this year. The gold prices have been falling over 20 percent this year. The inflation is still low, and so far we have seen an equity rally.
From 2008 to june 2011 gold prices jumped 70 percent! In that period Ben Bernanke pumped more than $2 trillion into the market to buy debt. I think that Ben Bernanke will never accept deflation, and if they are in need, they will continue to print money. No matter who the Fed chairman is.
Who`s the next Fed chairman? Larry Summers has been a name on the list but is withdrawing as a candidate to the next Federal Reserve Chairman. We will probably see a chairwoman next time after Ben Bernanke. Janet Yellen is the next big name.
Wall street love her, and they wan`t a person that will pump a lot of money into the market when the new crises hits. Janet Yellen is the right one to do that. She will PUMP! No matter what. She is the right person.
Investors will wait for the outcome of the FOMC meeting this week. No tapering will likely usher in «relief» rally for this precious yellow metal.
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