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Noted Author Questions Fed Forecast Posted May 9th, 2014
Los Angeles CA, May 9 (Tangible Investments) - by James O’Dell - The gold price continued to firm on Thursday, easing a modest $0.20 or 0.01 percent to close at $1,289.40 an ounce after key technical support at its 100 day moving average sparked buying, as investors continued to digest Fed Chair Janet Yellen's Senate testimony. Silver slipped $0.12 or 0.62 percent to close at $19.18 an ounce, while the gold/silver ratio jumped to 67.23 a near 3 1/2 year high.
The Fed chief admitted during her two days of questioning by lawmakers that it could take the central bank as long as eight years to reduce the size of its $4.5 trillion balance sheet to levels the economy was at before its collapse nearly six years ago. In the meantime, James Rickards, author of Currency Wars, continues to question the Fed's economic forecasts while repeating his assertion that the Fed tapered into weakness.
Rickards still believes the Fed may be forced to halt the taper by summertime, but adds that even if the central bank's massive quantitative easing (QE) program is scaled back completely, the Fed will be buying assets once again in 2015.
Meanwhile, it was President Putin's promise to pull his troops back from the Ukraine border, and his attempt to exert some control over the protesting Pro-Moscow separatists that sent the gold price below the $1,300 an ounce level earlier this week. It appears, however that the separatists remain determined to proceed with the referendum on autonomy on May 11 as planned, despite Putin’s apparent withdrawal of support.
Rickards Tweeted earlier, "US markets cheer Putin 'concessions.' Sorry, he's just driving a wedge between US & EU to increase his freedom of action in Ukraine." The New York Times recently wrote: What is unclear is “whether he was truly reversing course on Ukraine or if this was just another of his judo-inspired feints.”
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