Friday, 22 October 2010

Gold: when gold drops, bullish try to find a new story

The financial markets have been focusing on the likelihood of a second round of quantitative easing from the Federal Reserve in November, yet some market watchers wonder if there are not other factors that could influence trade.

But some market watchers wonder if issues like the uncertainty with U.S. home foreclosures might not turn the view of investors back to other problems after any Fed move. Last week, when it was discovered that several banks had signed off on thousands of foreclosures without reading the documents, shares of bank stocks fell. Bank of America, which bought the beleaguered mortgage giant Countrywide, is getting punished most for what’s being called “robo-signing.” While some homeowners are victims of fraud, others may be using this loophole to delay foreclosure.

He said the foreclosure uncertainty could be an issue if left unresolved. Given that stock, commodity and bond prices are all rising which is not normal – something like a revisiting of bank debt could be the factor that causes these markets to diverge. “Something is going to crack it,” Hackett said. => No, when those things rose, one down, GOLD, so it is not normal to HIM. He needs a new story.

Thus, he said, commodity prices as a whole will rally for at least another six months if the Fed eases. “People will still want hard assets until they’re convinced the Fed has stopped printing money,” Smitherman said.


What I believe is that all of them are just guessing. Nevertheless, gold price of around 1300 seems to be attractive for some.

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