Gold in holding pattern ahead of Fed meeting
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 D.C.[/caption]
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.
Gold ( GLD , quote ) 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 more rapidity.
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.