Tag Archives: federal reserve

It has become a beating drum; the Federal Reserve holds its meetings and inevitably someone exits with a proclamation that Quantitative Easing is going to be phased out. As the sole engine backing the stock market’s growth over the past five years, an end to QE could be catastrophic for your stock portfolio. Fortunately for stock holders, it has been one empty promise after another: Quantitative Easing rages on, and the liquidity it has created continues to push stocks higher.

You probably know that gold and silver dropped quite a bit last week. Despite that, every reason to protect your savings with physical precious metals still stands. But now you can get them at their lowest levels in over two years. If you liked gold and silver two weeks ago, you have to love them at today’s prices. Read why, in four simple points.

Ranging across the marketplace, gold spent the week defying common wisdom and forcing the hands of crystal ball gazers all over the world. On Friday gold closed at $1,648, with silver walking alongside, closing down 2.8% at $29.32. These swings proved too much for paper gold, creating an illusion that the yellow metal was collapsing. Technical sell-offs caused many to scratch their heads as gold stayed above $1,600. The jobs report, a stronger dollar, and an announcement by the Fed that QE3 may end sooner than expected were used as explanation for the bearish bull. Something to watch, however, is the Indian government seeking to balance its trade deficit by raising taxes on imported gold. India is the world’s biggest buyer of gold. If these consumers are priced out of gold, what could we expect from silver? Only time will tell.

On the heels of the Fed’s announcement of QE3, Morgan Stanley is already predicting a fresh round of quantitative easing to be thrust on top of the $40 billion to enter the economy each month. What does it mean for your investments? And for gold and silver?