Gold has remained stable as US payroll data came back worse than expected through not hitting the expected level for January coupled with the end of the Chinese holiday.
Janet Yellen, the new FED chairman will be holding a testimony today where she may announce the bond buying will be cut down by $10 billion, or even that the bond buying will be paused if the fed believe the economy needs a further set of positive data in order to continue the tapering.
Gold didn’t have the best 2013 as the world saw biggest drop the most in price in over 30 years, however since the beginning of 2014 the price has re bounded and many gold bugs are calling 2014 the “year of recovery”.
Globally equities are lower and the reduced bullion price has encouraged a wave of investors across the world, further the Shanghai Gold Exchange has climbed following the end of the Chinese holiday to its highest since May 2013.
Demand in China has gone from strength to strength and has now over taken gold obsessed India as the world’s largest user where as gold ETF’s are at their lowest since 2009, most of these holdings are listed in the US and Europe.
Things to watch:
Today, Janet Yellen will be giving her first semi-annual Humphrey-Hawkins testimony on monetary policy. With two sets of weaker than expected payrolls it will certainly be an interesting meeting so far as asset purchases are concerned.
It is likely her main concern will be re assuring the rest if congress than tapering is very much assessed on a meeting by meeting basis which is largely dictated by US economic data.