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Awaiting Federal Reserve’s Policy, Gold Holds Steady
Gold prices remained steady on September 13th as bullion investors were looking forward to the Federal Reserve’s policy on providing easing. In the past few days, Gold saw some extremely bright days as the German court issued a ruling in favor of the rescue fund for the Euro zone. This meant that Gold prices would recover and investors were also pretty active causing prices to soar. This court ruling will also have an impact on the decision that the Federal Reserve will make in its policy.
Market Buzzing With Hopes of QE3
The reason why bullion investors are eagerly looking forward to the decision of the Federal Reserve is that the agency is most likely to announce another round of quantitative easing. The reserve was holding a two day meeting regarding its policy and in the same meeting, the agency might announce another round of easing that is termed as QE3.
If that expectation becomes a reality, then you can expect gold prices to skyrocket again. Monetary policy is a positive factor for the bullion as it will stoke the outlook people have on inflation. This will in turn encourage investors to move towards the bullion market and the investment is a good hedge when you consider the rate at which the prices are rising.
2% Rise Witnessed This Month
Contrary to the trends that we have been witnessing over the past couple of months, gold prices have registered a net gain of 2% in the month of September alone. The month of August was also a good month for the bullion market and the yellow metal witnessed a 5% rise in the prices. This rise can be attributed to the activeness of the Central Banks in providing stimulus to assist the growing financial crisis.
Expected to Rise through $1,800 an Ounce
Jinrui Futures top analyst, Chen Min, said that if the quantitative easing becomes a reality, then the prices of gold is expected to rise through $1,800 per ounce. But he also added that the effect will be marginal and pointed out that it is not fair to expect the prices to touch $1,850.
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