Gold prices fell again today by roughly $40 as of the time I write this. The reason? Bernanke says that “action” might be necessary in the future and in case the European situation gets worse. But that’s just it — no QE3 just yet.
Over the last week, gold and silver have both seen a lot of increased demand and price pushes as investors were worried — or at least partially expecting — that the Fed would begin a new money-printing binge.
What About the Future?
I’ve written in the pastd that gold and silver investors need to be prepared for a tightening up on Fed policy over the next year or two. When the Fed increases interest rates, this could be a huge kick in the teeth to gold and silver prices. This isn’t slated to happen until late 2013 or early 2014.
In the meantime, what the Fed is going to do likely depends on next months data. If the economy continues to slow down and jobs are still not growing, then the Fed will likely move in with QE3 which is essentially a “print money and the world gets richer” approach — which is wrong, of course.
Like most of finance and economics, the entire process includes a lot of hurry up and wait. Next month, if the economy sinks some more, I’ll likely be buying a lot of gold and a lot of silver before the presumed announcement by the Fed chief that they will begin QE3.
If the data is good, I’ll just buy my regular scheduled gold and silver purchases that I have set up through Silver Saver, which is to say just a modest amount.
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