Does anyone think QE-2 will lower the price of metals short term...

[ximmy]

There is talk of QE-2 in November... I was wondering if this might ease the metals market for a short spell... Without a doubt, as the dollar continues to lose purchasing power silver to go well over $50.00 (100 might be a better guess)... but with the phantom idea of more dollars available (sheeple hope)... I wonder if it might be a good gamble to wait for a metals purchase around the end of the year...
ximy
----
There has long been speculation that another trillion-plus money-printing program called QE2 is coming, but only recently have there been concrete hints from the Fed along those lines. Among other things, New York Fed Vice President Brian Sack just this week squeaked out a comment about how, "In terms of the benefits, balance-sheet expansion appears to push financial conditions in the right direction.” Translating into English, “balance-sheet expansion” means the Fed adding to its balance sheet, i.e. printing money to buy stuff – i.e. QE2.

Thanks to that and other hints, most everyone now expects the Fed to announce a new QE program in November. The big banks have now openly begun to predict this, with JP Morgan Chase among others raising its odds of the Fed buying mortgages in the next 6 months from 10% to 50%. Another effect we’re seeing is that mortgage originators are hiring again, in anticipation of being able to fork out QE-funded mortgages.

http://www.rollingstone.com/politics/matt-taibbi/blogs/TaibbiData_May2010/217520/83512

[Plastic]

I would think that QE2, being nothing but pure inflation, should send metals skyward.

[ximmy]

I would think that QE2, being nothing but pure inflation, should send metals skyward.


absolutely it will (QE-2 will be very good for us)... but just as TPTB believe QE is the answer, so will the metals market behave the same... initially...

that be the question... :)

[Silver Rocket Bitches!]

The current surge in metals and other commodities was kicked off when the BOJ intervened to stop the Yen's rise.

We saw how successful that was. The yen rebounded within days. When the FED is forced to do the same, the dollar collapse will accelerate.

For metals to go lower at this point, aside from a normal correction, the dollar has to gain significant strength and where is that confidence in the dollar going to come from?

QE has become synonymous with dollar collapse. The gubmint and the FED are losing grip on their image as a benevolent guider of the markets and are being exposed for what they are: Shameless looters with a printing press.

[Horn]

If there are bets still placed on the dollar side at that time, and a mass effort to halt the the slide by central banks occurs.

January would be the month to worry about.

[osoab]

The current surge in metals and other commodities was kicked off when the BOJ intervened to stop the Yen's rise.

We saw how successful that was. The yen rebounded within days. When the FED is forced to do the same, the dollar collapse will accelerate.

For metals to go lower at this point, aside from a normal correction, the dollar has to gain significant strength and where is that confidence in the dollar going to come from?

QE has become synonymous with dollar collapse. The gubmint and the FED are losing grip on their image as a benevolent guider of the markets and are being exposed for what they are: Shameless looters with a printing press.


Those BOJ interventions now have the desired effect for just a couple hours.

A rush to sell margin positions would also create downside pressure to the paper price of metals.

Back to ximmy's question.

I am now looking @ mid December for a possible down leg. Options expiration and end of year profit taking could take the price down. Just look what happened last year. Any goose of the dollar to the upside might exacerbate a price slide under these conditions.

Then again I expected a slide in September. :conf:

[madfranks]

QE2 has already been going on for a while now, to the tune of around $45 billion so far. I assumed this was the reason for the continued rise in metals the past few months.

However, this time they haven't announced how much they're going to spend, because they're trying to retain the "element of surprise in a market where big expectations are already baked in". (http://www.businessinsider.com/the-fed-is-desperately-trying-to-regain-the-elemant-of-surprise-as-everyone-is-taking-qeii-for-granted-2010-9) So they might print $50 billion, they might do a couple trillion. Nobody knows, and that kind of uncertainty is going to be one more nail on the almost finished coffin of the American economy.

[Ash_Williams]

I don't think QE will hurt metals but I do anticipate a crash of $2-4 for silver this week only based on too-far-too-fast fear and profit taking. It took some profit on friday to try to get ahead of it.

[1970 silver art]

I don't think QE will hurt metals but I do anticipate a crash of $2-4 for silver this week only based on too-far-too-fast fear and profit taking. It took some profit on friday to try to get ahead of it.


There is a possibilty of a healthy pullback from current levels but not a crash.

[Neuro]

Increased volatility in the spot price, but the main direction will be up... They will be given more gambling money, but the warehouses will not fill up unless the prices are way higher...