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QE3: High Bump For Gold, But Dip Came Soon




The long-predicted QE3 finally happened. Ben Bernanke announced it at the Jackson Hole Economic Symposium.

The Federal Reserve launched the money printing round worth 40 billion $ with an 11 to 1 vote on September 13th, 2012.

The bond purchasing program is expected to stimulate the US economy, while low interest rates are expected to be held until mid-2015.

Some investors might consider the date, "September 13th" an "unlucky" date... Many saw this as another lost opportunity to buy gold at an affordable price.

The price jump destroyed hopes of small budget investors, who were waiting for too long to make a purchase. An ounce cost around 1,550-1,600 $/oz this mid-summer, while October values neared 1,800 $/oz.

If you bought gold in June, you could have easily earned around 200 $ per ounce, considering the prices reached in early October.

QE3 brought the prices of precious metals almost vertically to just under 1,800 $ and ounce. It peaked at exactly 1,790.30 $/oz, after being just above 1,530 $/oz this summer.

A plethora of commodity experts and investors, banks and other financial institutions are predicting gold to reach values above 1,900 to above 2,000 dollar per ounce.

Whether this will happen or not, remains to be seen. The boost to gold's price by the latest round of quantitative easing wasn't as strong as some expected. Gold took a dive in mid-October, reaching values as low as 1,720 $/oz on October 19th.

We can observe an abrupt dip, a decrease of around 50 $ per ounce and according to Kitco's predictions, prices will decrease further between October 29 and November 2.

There might be another opportunity to purchase gold before the end of 2012. It's most likely that this will happen during November 2012. Then, plentiful negative economic data from across the World is expected to give another push to the price of gold. If will eventually reach 2,000 dollars an ounce.





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