Gold prices are basically flat this morning as gold bugs begin
their two day Fed watch. Market participants are anticipating
the Federal Reserve to announce the start of its unwinding process
to its monthly $85 billion bond buying program at the conclusion of
the two day meeting.
[caption id="attachment_64360" align="alignright" width="300"]
The Federal Reserve U.S. Treasury Department building in Washington
Analysts' reports continue to vary after recent mixed economic
data ahead of the meeting ranging from 10 billion to 30 billion
reduction in stimulus. However, this morning growing
expectations for a $10 billion cut in Treasuries to $45 billion and
no cut in the $40 billion mortgage bond buying program.
) prices also found support this week when Larry Summers took his
name of the short list to succeed Fed Chairman Ben Bernanke as the
next Chairman. Mr. Summers is thought as being a hawk
and in turn would look to exit central bank's bond buying program
This leaves the Fed Vice Chairwoman Janet Yellen as main
contender - according to analysts and news outlets. The Choice
remains in the President's hands. However, Ms. Yellen
is considered to be more dovish than Mr. Summers and would likely
not be as aggressive to unwind the bond buying program in turn
helping to support the price of gold.