Better-than-expected US retail sales data sent gold tumbling to about the US$1,750 per ounce level last week, but it neared US$1,800 midway through this week.
Concerns about China’s Evergrande (HKEX:3333,OTC Pink:EGRNF) weren’t enough to support gold, and it was back around US$1,750 at the time of this writing on Friday (September 24) afternoon.
Weighing on the yellow metal this week were highly anticipated comments from the US Federal Reserve. After a two day meeting, the central bank indicated that it could start tapering bond purchases in November, assuming the job market continues to do well.
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“Participants generally viewed that so long as the economic recovery remains on track, a gradual tapering process that concludes around the middle of next year is likely to be appropriate” — Jerome Powell, US Federal Reserve
The Fed also said it will aim to start raising its benchmark interest rate next year, although it emphasized that it won’t do that until after bond buying has stopped.
A recurring theme in the conversations I’ve been having is whether the Fed will actually be able to do what it says it plans to do. Popular mining industry figure Ross Beaty is one person who recently shared his thoughts with me — he said that in general people are more confident in rhetoric from the Fed than they should be...
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