Hedge funds’ bullish bets on gold jump to four-year high
Hedge funds and other large speculators boosted their net-long position in gold.
The gold price turned higher on Wednesday trading up more than $17 at $1,285 an ounce, after Fed nominee chairperson Janet Yellen came out in support of the central bank’s stimulus program.
Yellen, a noted monetary policy dove and considered an architect of the US Federal Reserve’s quantitative easing program, in a prepared statement said “supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”
The Fed’s is looking for signs of a solid recovery in the US economy as it prepares to start winding down its QE program running at $85 billion a month and set to reach $4 trillion by the end of the year.
But Yellen’s statement seems to indicate that the economy is not there yet.
“We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession,” Yellen said adding that the jobless rate is “still too high” and the economy is performing “far short” of its potential.
Inflation remains low “and is expected to continue to do so for some time,” according to Yellen, 67, who would be the first female to lead the US Federal Reserve.
“For these reasons, the Fed is using its monetary policy tools to promote a more robust recovery. A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases,” she said.
The money printing in the US and similar action in Japan, Europe and elsewhere following the financial crisis in 2008-2009 have been a massive boost for gold.
Gold was trading around $830 an ounce before Chairman Ben Bernanke announced Q1 in November 2008.
4 Comments
Wilmer
This is going to be a real mess once they start to taper. Can you say ‘house of cards’?
RUSS SMITH
Will Old Yeller ultimately loose ground to the kick the can down the road crowd or is time as they say really & absolutely on the side of Old Yeller as far out into the US monetary future as OUR eyes can see? Janet as far as I can see is another Big Bankers buddy using unemployment as the emotional basis for her inflationary pleas to destroy government debt via US $ debasement tactics and nothing more or less. Go get them Jan; because you know we can all use the fiat money. Keep those Bernanke helicopters primed and ready!!
RUSS SMITH, CA. (One Of Our Broke, Fiat Money States)
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RomanAlex
How can they ever “taper”; the market can only go up. They have built that expectation. Everything is too big to fail, except the growing hoards of people on food stamps. Of course, if you cut off food aid, you can kill off people thus mitigating the problem somewhat. Frightening country.
Anthony Maw
hmmm….the “normal approach to monetary policy” seems to be to just QE print more money and running the stock markets into a huge bubble….