by Adam Hamilton, Gold Seek:
Gold’s biggest psychological overhang this year has been the fate of the Fed’s third quantitative-easing campaign. Gold futures traders hang on every word of Fed officials, extrapolating them into a timeline for ending QE3. This consuming obsession fueled unprecedented selling that spawned a stunning gold anomaly. But as QE3’s nature becomes more apparent, gold is due for a massive mean reversion higher.
It probably already started. Just this week, the Fed Chairman Ben Bernanke aggressively backtracked on his recent timeline for slowing and then ending QE3! At a speech in Massachusetts, he said the Fed is failing on both sides of its dual mandate with unemployment too high and inflation too low. Therefore the Fed ought to keep maintaining zero interest rates and buying bonds until both areas greatly improve.
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