GOLD: the effects of tapering (Bernanke 2013 vs Powell 2021)
Hi Guys,
to keep it simple...
Financial Crisis 2007-2008 and Pandemic led to the implementations of QE programmes in combination with other accomodative monetary policies.
Following these events FEAR drove the value of Gold to its highest at $2.000 both in 2011 and in 2020.
In both these occasions, after having reached $2000, the precious metal bounced off the support to unfold lower highs to form what may look like descending triangles.
In 2013 the support was finally broken when Ben Bernanke announced a "tapering" of some of the Fed's QE policies contingent upon continued positive economic data. Specifically, he said that the Fed could scale back its bond purchases from $85 billion to $65 billion a month during the upcoming FED policy meeting.
On Sept.22nd, 2021 Jerome Powell said tapering of bond buying coming "soon".
Can you see the similarities? Will Gold react the same way as it did back in 2013?
It seems too easy to be true. LOL.
Hope the above is of interest but if you have any queries please do not hesitate to ask.
Good luck everybody!
Cozzamara
Disclaimer:
Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
Trading in foreign exchange (“Forex”) on margins entails high risk and is not suitable for all investors. Past performance is not an indication of future results. In this case, as well, the high degree of leverage can act both against you and for you. Before you decide to invest in foreign exchange, you should carefully assess your investment objectives, experience, financial possibilities and willingness to take risks. There is a possibility that you will lose your initial investment partially or completely. Therefore, you should not invest any funds that you cannot afford to completely lose in a worst-case scenario. You should also be aware of all the risks associated with foreign exchange trading and contact an independent financial advisor in case of doubt.
to keep it simple...
Financial Crisis 2007-2008 and Pandemic led to the implementations of QE programmes in combination with other accomodative monetary policies.
Following these events FEAR drove the value of Gold to its highest at $2.000 both in 2011 and in 2020.
In both these occasions, after having reached $2000, the precious metal bounced off the support to unfold lower highs to form what may look like descending triangles.
In 2013 the support was finally broken when Ben Bernanke announced a "tapering" of some of the Fed's QE policies contingent upon continued positive economic data. Specifically, he said that the Fed could scale back its bond purchases from $85 billion to $65 billion a month during the upcoming FED policy meeting.
On Sept.22nd, 2021 Jerome Powell said tapering of bond buying coming "soon".
Can you see the similarities? Will Gold react the same way as it did back in 2013?
It seems too easy to be true. LOL.
Hope the above is of interest but if you have any queries please do not hesitate to ask.
Good luck everybody!
Cozzamara
Disclaimer:
Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
Trading in foreign exchange (“Forex”) on margins entails high risk and is not suitable for all investors. Past performance is not an indication of future results. In this case, as well, the high degree of leverage can act both against you and for you. Before you decide to invest in foreign exchange, you should carefully assess your investment objectives, experience, financial possibilities and willingness to take risks. There is a possibility that you will lose your initial investment partially or completely. Therefore, you should not invest any funds that you cannot afford to completely lose in a worst-case scenario. You should also be aware of all the risks associated with foreign exchange trading and contact an independent financial advisor in case of doubt.
Comment:
Whilst there a lot of similarities between the 2011-2013 period and the 2020-today period please note that a major difference could be the level of inflation. In 2011-2013 inflation was below 2% but now it seems it may well run above (even if the FED says it should be transitory).
