Ahead of the FOMC statement / decision to whether to taper or not and by how much gold prices dipped below the all-important $1,300 level struggling to keep its head above the $1,300.
Ben Bernanke
Gold prices in the 2013 has for the most part tracked the expectations of the FOMC unwinding talks of its $85 billion per month bond buying program. Suggesting a inline tapering.
Analysts this morning continue to have a wide range of expectations on how much will the Fed cut its bond buying from $10 billion up to $75 billion.
With the latest housing economic data being mixed at best we find analysts have shifted expectations that Fed will leave its $40 billion mortgage bond buying program intact to continue to help the slowing housing market.
Gold (GLD, quote) has roughly lost 23% on the year with U.S. economic data indicating the U.S. was recovering albeit slowly but if the FOMC tapers on the low end or even less than the $10 billion could & bring the gold bugs back into the market on thinking that the U.S. economy may not be able to stand on its own two feet.
The Fed statement will be key as well. We will need to see how the Fed is looking at the data and what data to make it decisions.