The Gold Report
Notable Quotes
"ICG has closed a CA$2.5M flow-through placement." (12/24/15) Integra Gold Corp. - Thibaut Lepouttre, Caesars Report More >
"The exploration upside at MAG's Juanicipio project is substantial." (12/23/15) MAG Silver Corp. - Gwen Preston, Resource Maven More >
"AKG's management continues to deliver on its development milestones." (12/22/15) Asanko Gold Inc. - Nana Sangmuah, Clarus Securities More >
"We are initiating coverage on KDX with a Buy rating." (12/21/15) Klondex Mines Ltd. - Don Blyth, Paradigm Capital More >
"VIT's Eagle is a shovel-ready, fully permitted, prefinanced gold project." (12/17/15) Victoria Gold Corp. - Tom Hayes, Edison Investment Research More >
Whipsaw
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Junior Mining Weekly (03/24/2009)
On Wednesday, 18 March, we saw a classic trader's whipsaw in the market on the heels of the Federal Reserve's announcement that it would provide "quantitative easing" to the tune of US$1.15 trillion. In this case, quantitative easing means that the Federal Reserve will be buying US$300 billion in longer-term U.S. treasuries, an additional US$750 billion in agency mortgage-backed securities and US$100 billion in agency debt. This increases the total potential purchases of mortgage-backed securities to US$1.25 trillion and the potential purchases of agency debt to US$200 billion. The announcement of quantitative easing was not a surprise; it was the magnitude of the easing that was an eye-opener. The announcement precipitated the whipsaw in the market, and the price movements for gold exemplified the change. Bullion traded from US$929/oz to a low of US$883/oz, and on the back of the news from the Fed the price rocketed back up to a high of US$967/oz. The Fed and other central banks are printing money, and the amount of money being created is not insubstantial. Over time, this will no doubt fuel inflationary pressures and it lends credence to those who argue against the value of fiat currencies. Both of these factors are supportive of gold and, given the likelihood for further quantitative easing in the near future, gold remains well placed to re-challenge $1,000/oz. |
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