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Philly Fed President thinks QE3 isn't big enough, yet its size and duration is undetermined
Pinnacle Digest writes: Thanks to a falling Euro and Sterling, the US dollar has managed to rally today, despite a fresh round of quantitative easing just two weeks ago. This has caused gold to pullback.
Given the uncertainty, which still remains after two years of a lackluster crises management job from its leaders, European stock markets have retreated once again, with the French CAC40 index losing 2.4% today.
Adrian Ash of bullionvault.com’s explains that anti-austerity protesters clashed last night in Madrid and a general strike in Greece is bringing much of the Southern EU economy to a stand still. While it is our belief at Pinnacle that Greece is too far gone to save, Spain still has a chance to recover, but only if its people can go through some incredibly difficult economic times.
Despite all the economic turmoil in Europe, there are bright spots for investors, specifically precious metal investors.
"It's bullish when gold goes up in other currencies than the Dollar," Bloomberg today quotes Mitsubishi Corporation's precious metals strategist Matthew Turner, "because it means it's a fundamental story rather than a currency issue.
In his latest article, Adrian Ash highlights an important event that transpired today. US Central Banker, Charles Plosser, President of the Philadelphia Federal Reserve, warned that QE3 was likely not enough and that he thinks the Fed needs to do more.
So how much QE is enough?
After all, this latest round of loose monetary policy has no expiration date. No one knows how big it will even be. Yet Plosser thinks it isn’t enough. There are some renegades working for the Fed these days and it will only lead to further inflation - which is good news for gold prices.
According to Adrian Ash, Marc Ground at Standard Bank in London stated “[But the] accommodative monetary policy stance from the Fed will support precious metals, particularly gold and silver, well into 2013."
According to Stephen Suttmeier at Bank of America-Merrill Lynch, "Gold prices point to a stronger rally to $2050-2300 and up to $3000 longer-term."
Click here to read Adrian Ash’s entire article on where gold prices may be headed.