Expect more quantitative easing and no tapering until 2014Blanchard and Company
Executive Vice President David Beahm was interviewed today by MarketWatch, which is part of the same financial-news corporation that includes The Wall Street Journal and Barron's, among other publications. "Gold is way oversold,"
Beahm commented for the July 15 article titled "Gold futures gain for fifth session in sixth," written by Myra P. Saefong and Saumya Vaishampayan."That, paired with (Federal Reserve chief Ben) Bernanke's comments last week, which were remarkably different from his comments he made two weeks ago, are bullish for gold."
Because of growing signs -- including today's poor retail-sales report -- that the U.S. could be slipping back into recession, Beahm predicted that the Fed's monetary policies will remain loose. "It is clear that the United States economy is not as healthy as the Fed chairman had hoped for and this will lead to more quantitative easing. The tapering will likely not begin until 2014 and rates will remain low for a long time after that."
For more clues on the Fed's future direction, pay attention to Bernanke's testimony to the House Financial Services Committee Wednesday (July 17). A transcript of his prepared remarks will be released at 8:30 a.m., and the hearing will commence at 10 a.m. He also will testify before the Senate Banking Committee on Thursday, July 18, starting at 10 a.m.
If Bernanke makes more dovish noises, gold could rise. If he sounds hawkish, gold might lose some of its recent momentum. Stay tuned.Read Article