QE3 is now history... Or Is It?

Is the end of QE really a sign of a strong U.S. recovery? Some analysts agree, forecasting that gold will fall towards the $800-$900 level, while others fear that without Fed’s bond-buying program, a market crash may be on its way, leading to investors’ renewed interest in gold.

On October 29, the Fed stopped pumping money into economy in the form of the third round of Quantitative Easing, but there are ways in which the program is still present.

In the Fed’s statement we could read the following: “Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction”. These are the subtle signs that not everything is over just yet. Ending QE is not putting on the brakes; it is just easing off the accelerator.

In the December Market Overview we take a much closer look into this very important matter, explain the above intricacies and discuss their impact on the gold market. We invite you to read it and stay prepared for the coming changes.