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Gold Price Foreshadowing FOMC Announcement?
Pinnacle DIgest writes: In his latest article, Gary Tanashian examines Friday’s action in gold, which saw the precious metal rally $60 on the back of a weak jobs report from the US.
Gold stocks and bullion prices sniffed out coming inflationary pressure expected to hit the market and economy. With the Federal Open Market Committee concluding its two day meeting on June 20th, many expect to see further forms of easing. At Pinnacle DIgest, we suspect 'Operation Twist' will be extended.
It is well known that the Fed’s greatest fear is a deflationary environment. With weak job growth it may give Bernanke an excuse to kick inflation back into 3rd gear and continue to drive asset prices up, while eating away at the US’ debt load.
Tanashian points to the fact that gold has a way of foreshadowing what will happen with Fed policies as it typically makes moves to the up or downside well in advance of FOMC meetings.
Click here to read Tanashian’s latest article on the subject.