by Alasdair Macleod, Gold Money:
The second tapering reduction, a further $10bn per month, was announced this week. It was we are told by the news channels fully expected. This is probably the initial reason why US Treasury prices rose on the news, because bears would have bought back their positions. However, weakness in emerging market currencies indicates that there is a safe-haven element developing in US Treasury bond prices.
It’s against this background that gold traded in a $20 range between $1250 and $1270 until Thursday, when gold was finally sold down to the $1240 level and silver to $19.10. At the same time the US dollar rallied strongly, being the West’s preferred safe-haven from emerging market currency volatility. This is now the developing story, which may turn out to be the mainspring behind the gold price in the coming months.
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