Gold (GLD) & Silver (SLV) Slightly Lower as Bernanke Razzes Skeptics
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It zigged. It zagged. It spiked higher, right before it went back down. Gold, for lack of a better word, is indecisive. It doesn't know what it wants, and as a result it has been unable to break out of an increasingly tight trading range.
Gold's problem is that there simply is no conviction on either the sell or buy side. On the one hand, a stronger dollar is keeping a lid on a major rally. On the other hand, speculators fear that Fed Chairman Bernanke will eventually be painted into a corner regarding QE3 in the U.S. And while it is clear he is reluctant to pull the trigger, if economic conditions in the U.S. continue to deteriorate, he will not have a choice.
During his testimony before congress today, Bernanke mocked naysayer who predicted a collapse of the U.S. dollar and hyper inflation. He also expressed a fair amount of confidence that the U.S. will not experience either of these phenomena.
If he is correct, it would be a huge blow to the confidence to fringe economists who have been pounding the table on gold for years. So far, Bernanke has the upper hand. Then again, naysayers could care less what Bernanke says unless it involves printing more money – and that will depend on fundamental economic conditions in the U.S., or so the story goes.
So far the data doesn't tell a convincing story either way, and until it does, the indecisiveness is likely to continue.
SPDR Gold Trust ETF (NYSE: GLD) was lower by 0.27 percent on Wednesday. Year-to-date, GLD has lost 1.84 percent year-to-date. iShares Silver Trust ETF (NYSE: SLV) traded in sympathy with GLD today.
Gold's problem is that there simply is no conviction on either the sell or buy side. On the one hand, a stronger dollar is keeping a lid on a major rally. On the other hand, speculators fear that Fed Chairman Bernanke will eventually be painted into a corner regarding QE3 in the U.S. And while it is clear he is reluctant to pull the trigger, if economic conditions in the U.S. continue to deteriorate, he will not have a choice.
During his testimony before congress today, Bernanke mocked naysayer who predicted a collapse of the U.S. dollar and hyper inflation. He also expressed a fair amount of confidence that the U.S. will not experience either of these phenomena.
If he is correct, it would be a huge blow to the confidence to fringe economists who have been pounding the table on gold for years. So far, Bernanke has the upper hand. Then again, naysayers could care less what Bernanke says unless it involves printing more money – and that will depend on fundamental economic conditions in the U.S., or so the story goes.
So far the data doesn't tell a convincing story either way, and until it does, the indecisiveness is likely to continue.
SPDR Gold Trust ETF (NYSE: GLD) was lower by 0.27 percent on Wednesday. Year-to-date, GLD has lost 1.84 percent year-to-date. iShares Silver Trust ETF (NYSE: SLV) traded in sympathy with GLD today.
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