Weekly Fundamentals – Recent Developments Support Gold’s Outlook
Gold gained for a second week. We concluded there were 3 key factors driving gold higher last week. First, while the Fed announced no change in interest rates and stimulus measures, it’s clear that policymakers were seriously considering additional easing measures such as large-scale purchases of mortgage-backed securities. Interestingly, 3 members (Minneapolis Fed President Kocherlakota, Philadelphia Fed President Plosser and Dallas Fed President Fisher) who dissented implementation of operation twist at the last meeting dropped their dissent while Chicago Fed President Evans voted against the decision to stay on hold as he favored additional policy accommodation.
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