Gold is in constant rally as the world traders are betting on further quantitative easing (QE3) by Fed. Fed’s much awaited policy decision of just round the corner is believed to be a focal point to dictate the enduring gold rally. Richard Hastings, a macro strategist argues “If additional Fed action doesn’t happen, the monetary side of gold’s story would come under pressure, risking a breakdown closer to $1,625 an ounce.” This statement clearly indicates the sensitivity of much hyped monetary policy of Fed in U.S and subsequently entire global economy.

The pressure solely lies on the Fed’s authorities as they have to stringently decide upon the magnitude of quantitative easing upon severe scrutiny of current U.S economic position in terms of job creation, investment growth, ongoing unemployment rates and overall economic picture of the nation. Economists from all around the world opine that the intended monetary policy ought to only address ongoing problems or economic issues so that it may not create inflationary pressure in the economy and ‘Deviate’ the set economic targets.   

Though the policy decision is highly expected to affect the prices of ‘Yellow Metal’, many market fundamentalists opine the outcome of intended policy may only be related with interest rates and the market may not hear anything about bond buy-back program.

The entire market, along with diplomats, economists and global investors are expecting any form of easing from the Fed before ‘It gets worst to react and control the market.’ Thus, the entire global economies are in wait-and-watch mode concerning Fed’s action.

Note: The blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.