Following the announcements of European political and monetary authorities the price of gold in London yesterday morning reached its highest level since February at 1742.75 dollars. Main catalyst: expectations launch a “QE 3″ by the Fed tonight. But as the deadline approaches the question enters of new operators. At the end of the first auction on the London market an ounce of gold was trading this morning 1730.5 dollars and 1339.8 euros.
According to Swiss metals traders the decline of gold began yesterday after the long-awaited decision of German Constitutional Court in Karlsruhe: they finally endorsed the participation of Germany in the European Stability Mechanism (ESM) intergovernmental fund with 500 billion euros. An important factor because the ECB has conditioned its possible purchase of debt to the accession of the state corresponding to the MES.
Either, but stresses that MKS Karlsruhe judges insisted on limiting the participation to the German MY share of $ 190 billion. To go beyond, a new German parliament’s vote is required. This is according to the speaker that this ad has lowered the price of gold yesterday. Others think it is a movement of profit taking before the announcement of the U.S. central bank, the Fed, whose monetary policy committee will end tonight and will be followed by a press conference.
According to economists forecasts the Fed should announce a third round of quantitative easing, or QE3, at the end of its two-day meeting which ends today extending its zero interest rate policy to 2015, summarized the brokers at RTFX analysts.
Recall that the U.S. central bank has already launched since late 2008 two times quantitative easing. In total they have led to the purchase of 2,200 billion dollars of federal debt obligations, para-public and securitized mortgages.
The Fed has broadened and degraded the quality of its balance sheet which had a negative impact on the relative value of the currency in which it is responsible, the U.S. dollar. Other central banks such as the Bank of England and the ECB now gradually followed suit. These actions of unconventional monetary policy explain much of the recent rise in gold according to many stakeholders they degrade the value of fiat currencies without intrinsic value.