"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 16 hours Economists Polarized On Trump’s Tariff Plan
  • 1 day Why Are Investors Overlooking Gold Stocks?
  • 2 days The App That Democratized Trading Is Now Worth $5B
  • 2 days Super-Cycles: Why Gold Is Set For A Breakout
  • 2 days U.S. Sanctions Russia For Election Meddling And Cyberattacks
  • 2 days Snap Shares Tank Over ‘Slap Rihanna’ Campaign
  • 2 days How Low Can Bitcoin Go?
  • 2 days Amazon’s Japan HQ Raided In Anti-Monopoly Push
  • 2 days Is Barrick Gold Close To Finding A Bottom?
  • 2 days Morgan Stanley’s Top 10 Short-Term Stock Picks
  • 3 days China: The Land Of The Ultra-Rich
  • 3 days Alibaba Soars On Reports Of China Listing
  • 3 days What Killed Toys ‘R’ Us?
  • 3 days SEC And IRS Take An Aggressive Stance On Cryptocurrencies
  • 3 days Bears And Bulls Face Off In Gold Markets
  • 3 days Bitcoin Is Winning Over The Housing Market
  • 3 days Markets Slide Sideways As Trade War Fears Linger
  • 3 days Why Aren’t Millennials Investing?
  • 4 days Bitcoin And Banking: The Next Mobile Payment Revolution
  • 4 days SEC Cracks Down On Silicon Valley’s “Disruptive Tech”
Amazon’s Bid For A Monopoly On Everything

Amazon’s Bid For A Monopoly On Everything

Amazon started in e-commerce, but…

Consumer Confidence Fails To Boost Retail Sales

Consumer Confidence Fails To Boost Retail Sales

Consumer confidence measured by market…

Adrian Ash

Adrian Ash

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is…

More Info

Quanticipation in the Gold Price

Will he, won't he? Either way, gold says more QE is coming in due course regardless...

So Here's a turn-up for the goldprice.

Today saw gold priced in Dollars - and everything else - rising after disappointment over new quantitative easing from the US Federal Reserve.

Maybe Ben Bernanke's much-awaited speech at the annual Jackson Hole shindig for central bankers wasn't so disappointing after all. Certainly the Wall Street Journal seems to think that, and its own inhouse "Fed wire" journalist Jon Hilsenrath to boot! But if today's speech was a promise, it fell a long way short of matching 2010's big event. Back then, Bernanke made the imminent launch of QE2 plain. Whereas the financial media's first-rush response today was headlined "Bernanke: No more easing, for now".

So maybe the gold market's just got its mojo back. Or perhaps this week's anticipation - the same anticipation we've seen for times this summer - merely put the gold price on hold, as the buying already under way took pause.

Gold $ Per Ounce Chart

As you can see, the gold price hit a classic bout of the doldrums in summer 2012. And within that $100 trading range, you can see quanticipation - the anticipation of quantitative easing - blowing a hot breeze first this way and then that.

Starting in May, gold priced in Dollars has risen on any and every "hint" of fresh money printing in the US, only to slip back when the Fed then disappoints. "Will he? Won't he?" All financial markets have been trying to guess the answer. But you can most clearly see it in the price of gold - that most sensitive asset to monetary policy. Because buying gold is always a vote of "no confidence" in central banks. Selling it means you think the Fed has got on top of its job.

And today, post-Jackson Hole, gold has now done something it's failed to do every time previous this summer. It rose despite Ben Bernanke's damp squib of a speech. So perhaps the bullion market has finally shrugged its shoulders and accepted that - whatever the Fed says - it will choose to pull the biglever marked "More Money" sooner or later.

Market-timing be damned? Quanticipation might now be driving the gold price regardless of Fed jaw-boning. The all-too typical autumn rally in gold looks very much in train either way.


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter