Gold Going to $1300 Wednesday, if Fed announces QE2 Tuesday

[gunDriller]

Fed-watchers have been talking more & more about Quantitative Easing the last 6 months.


I found some articles on the subject -

http://news.yahoo.com/s/nm/20100806/bs_nm/us_markets_stocks

"The U.S. economy lost 131,000 jobs in July -- more than twice the decline of 65,000 that economists forecast in a Reuters poll."

Fedwatchers are saying the Fed will take steps towards QE2 if the July job numbers are bad.

And the July job numbers are bad.

http://www.forexhound.com/article/Pattern_Price_Time/Analysis/US_Dollar_Weaker_as_Fed_Mulls_Quantitative_Easing/225605

"According to the Wall Street Journal, the Fed will consider using cash from maturing mortgage-bond holdings to buy new mortgage or Treasury Bonds instead of allowing its portfolio to shrink. Insiders believe the Fed’s decision will be heavily weighted by this Friday’s U.S. Non-Farm Payrolls Report."

"The U.S. Dollar is under pressure against most majors on speculation the Fed will consider restarting its quantitative easing program following next week’s FOMC meeting on August 10."


The Fed doesn't usually pre-announce a move any more than this.

I think they'll announce the QE formally soon.

If it happens this Tuesday August 10, Gold will be at $1300 on Wednesday.


What happened last year when the Fed formally announced $300 Billion of QE in March 2009, gold was up 8% in the next 24 hours.

[Steal]

That would be nice, will sell all my 1 oz coins then. Me thinks gold gonna tank and hard on a sell off in sept/oct.

On a side note, what ever they do it will ( or not) be benificary to their bond sales wed/thur. Guess if they are their own buyer really makes no differance anyways.

[gunDriller]

That would be nice, will sell all my 1 oz coins then. Me thinks gold gonna tank and hard on a sell off in sept/oct.

On a side note, what ever they do it will ( or not) be benificary to their bond sales wed/thur. Guess if they are their own buyer really makes no differance anyways.


the thing is, they've done a lot more QE than the $300 Billion announced last March. according to some of the guys that track the bond sales etc., e.g. Denninger, they've been doing QE anyway - more than $1.5 Trillion worth since last March 2009.

so when they make the official announcement, i guess it's supposed to re-assure people because the Fed is saying, "Yep. We're printing money."

of course, they're also talking about all these complicated mortgage buybacks etc. so it is not easy to understand all the details.

a lot of what the Fed says, i would describe as "noise" - like a homeless guy mumbling at the bus stop. but every once in a while, they deliver some "signal", and come right out and make the announcement that I can only assume is supposed to make people feel good.

"We're printing $X00 Billion."

so whether they will deliver some clear signal this Tuesday, or just keep mumbling, i don't know.


as far as a downward move in September/ October, the main downward movements the last 2 months have been at options expiry times.

or you mean a bigger downward move for gold, because the stock market crashes in September October, kind of thing ?

[Steal]

or you mean a bigger downward move for gold, because the stock market crashes in September October, kind of thing ? Is what I was refering to. I loaded up on smaller size fracs last drop to 1,180. So, instead of keeping on loading up, if get nice breakout, will sell some big pieces to somewhat cover all the lil ones I got. Then stay in cash and save some pwdr up incase she really blows.

[gunDriller]

or you mean a bigger downward move for gold, because the stock market crashes in September October, kind of thing ? Is what I was refering to. I loaded up on smaller size fracs last drop to 1,180. So, instead of keeping on loading up, if get nice breakout, will sell some big pieces to somewhat cover all the lil ones I got. Then stay in cash and save some pwdr up incase she really blows.


last time they made a QE announcement, they definitely stomped on the price in the weeks before the announcement.

the day of the announcement in March 2009, gold had started the day at about $920 and was down to about $880 when they made the announcement. then it rose about 8% during the next 24 hours, to about $960.

i don't know what is happening on Tuesday, but they are having a Fed meeting and there are some REALLY crappy economic numbers to deal with - and an election is 3 months away.

so if they were ever going to play the "QE2 to goose the economy 3 months before the election" card, this is, by definition, the time to play that card.


who knows, maybe they will give a big speech and talk about "Paradigm Shifts" and call it a day. ;D