Bernanke Warns on Fiscal Cliff, Precious Metals Steady
Ben Bernanke warned in a speech earlier today that failure to resolve the fiscal cliff would post a “substantial threat” to the U.S. economy.
Speaking at the Economic Club of New York, the Federal Reserve Chairman provided little in the way of new insights regarding the central bank’s stance on monetary policy. Instead, Bernanke urged lawmakers in Washington, D.C. to “protect the economy from the full brunt of the severe fiscal tightening at the beginning of next year that is built into current law.”
With regard to the impact that the Fed’s third round of quantitative easing (QE3) has had since being announced in mid-September on financial markets and the economy, Bernanke contended that it is “still too early to assess the full effects.”
As one might expect given the lack of substantive new information contained in Bernanke’s speech, the markets showed a muted response to the Chairman’s remarks.
The S&P 500 Index fell modestly soon after the Bernanke’s comments, but later rebounded to near unchanged at 1,386. Gold futures followed a similar trajectory, sliding to $1,722 before rounding to $1,727 per ounce, while silver held near the flatline at $33.15 per ounce.
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Gold and silver shares continued to lag the precious metals, however, as the Philadelphia Gold & Silver Index (XAU) traded down this afternoon by 1.0% at 168.90.
Notable XAU in the red included Coeur d’Alene Mines (CDE), Randgold Resources (GOLD), and Silver Wheaton (SLW). Shares of CDE slid by 2.0% to $23.21, GOLD by 1.3% to $105.40, and SLW by 1.7% to $36.27.
The full text of Bernanke’s speech is available at the Fed’s website:
http://www.federalreserve.gov/newsevents/speech/bernanke20121120a.htm
2012-11-21 06:00:17
Source: http://www.goldalert.com/2012/11/bernanke-warns-on-fiscal-cliff-precious-metals-steady/
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