Gold trading quietly this morning despite Fed repo market rescue operation
Gold trading quietly this morning despite Fed repo market rescue operation by Michael J Kosares for USA Gold
TDC Note – Wait till gold gets loud! The whole world will hear it when breaks $1,700, then $1,800. The noise will be tremendous!
Tempered by uncertainty over the results of today’s FOMC meeting, gold is trading quietly – up $3 at $1504. Silver is down 9¢ at $17.92. The quiet though could give way to more volatility later today as the market sorts out the impact of the Fed’s cash rescue of the overnight repo market (Please look for details at our Live Daily Newsletter). According to early press reports, analysts and long-time market participants are concerned that Fed cash injections might be needed on a “regular basis.” In other words, the Fed suddenly might be forced to reintroduce some version of the quantitative easing programs that followed the 2008 financial crisis – a prospect that could add an interesting twist to the Fed’s deliberations today. Those policies, we should add, played a central role in gold’s push to all-time highs over $1900 per ounce.
Quote of the Day
“An ounce of gold cost $271 in 2001. Ten years later it reached $1,896—an increase of almost 700 percent. On the way, it passed through some of the stormiest periods of recent history, when banks collapsed and currencies shivered. The gold price fed on these calamities. In a way, it came to stand for them: it was the re-discovered idol at a time when other gods were falling in a heap of subprime mortgages and credit default swaps and derivative products too complicated to even understand. Against these, gold shone with the placid certainty of received tradition. Honored through the ages, the standard of wealth, the original money, the safe haven. The value of gold was axiomatic. This view depends on a concept of gold as unchanging and unchanged—nature’s hard asset.” – Matthew Hart, Vanity Fair