Quantitative Easing and the Price Of Gold - InvestingChannel

Quantitative Easing and the Price Of Gold

[Some thoughts on today’s QE4 announcement and what it might mean for the gold price.]

The term “QE4″ is what most business writers appear to be calling what will be announced today when the Federal Reserve’s policy committee adjourns and issues a press release. They’ll also provide updated economic forecasts and then Fed Chief Ben Bernanke will conduct a quarterly press conference, so, there could be a good deal more from the Fed today in addition to the announcement itself.

Bernanke GoldFor those who don’t already know, “QE4″ will be an open-ended program of $45 billion per month (possibly more, but certainly not less) in central bank money printing that will be used to purchase long-dated Treasuries.

Combined with the ongoing QE3 program of $40 billion per month in new money to buy mortgage backed securities, the Fed will soon be creating $85 billion per month “out of thin air” until such time that the economy and the labor market show major signs of improvement or other considerations (e.g., higher inflation) cause them to change course.

All of that is relatively well known in advance, however, what is not known – and what is very important for precious metals investors – is what this all means for the price of gold.

We’ll find out soon enough, but one thing is certain – markets are clearly not responding the same way they did in advance of previous quantitative easing announcements.

As shown below, there have already been three “QE” announcements…

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

Related posts

Carl Icahn Increases His Stake In Take-Two Interactive To 10.68%

ValueWalk

iPad Mini Display Outperformed By Kindle Fire HD & Nexus 7

ValueWalk

Foxconn Might Open Manufacturing Plants In The U.S. [REPORT]

ValueWalk

Peter Cundill Protégé Tim McElvaine on Investing in Japan [VIDEO]

ValueWalk

Set Bing Home Page Image As Lock Screen In Windows 8

ValueWalk

Morning Market News: JCP, APO, MCHP, ZIP, ENR, LGF, EA, ATVI, COV, LNT

ValueWalk