Thursday, September 6, 2012

Bernanke Bluster Boosts Precious Metals

Federal Reserve Chief Ben Bernanke recently announced a plan for more central bank money printing and experts believe it means the course will be set for much of the same as the year progresses. The news of more money in circulation acted to boost values of precious metals, and gold and silver shot to levels not seen in 10 months. The jump pushed gold to $1,669.70 an ounce and silver to $30.78 an ounce, but experts say this is not so impressive when viewed in context of cyclical lows and economic forces that have pushed precious metals prices down from previous heights. For more on this continue reading the following article from Iacono Research

Following an impressive technical breakout the week prior that constituted the biggest combined jump in gold and silver prices in ten months, precious metals moved sharply higher again last week, capped by a late-week surge spurred by heightened expectations of more central bank money printing after Fed Chief Ben Bernanke defended previous easy money policies, what many viewed as paving the way for more of the same.

After surging nearly $40 an ounce on Friday, the gold price ended at a five-month high while posting its biggest monthly gain since January, and silver jumped more than $1.00 an ounce after the Fed Chairman spoke, rising to its loftiest level in four months.

For the week, the gold price rose 1.3 percent, from $1,669.70 an ounce to $1,691.30, and silver rose 3.1 percent, from $30.78 an ounce to $31.74. Spot gold is now up 7.8 percent for the year, down 12.0 percent from its 2011 high, and silver is up 13.9 percent in 2012, down 35.6 percent from its peak last year.

The recent move higher for the gold price appears far less impressive when viewed in the context of recent corrections as shown below and, importantly, the current recovery now appears to be “on track” with the last two major cyclical upturns that followed moves down that began in 2006 and 2008.

[To continue reading this article, please visit Seeking Alpha.]

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