March 26, 2012 – Gold and silver are performing very well in intraday trading after an address by Federal Reserve Chairman Ben Bernanke early this morning hinted at a third Quantitative Easing program and acknowledged the dubious nature of the recent economic reports that have been giving the markets a boost. Bernanke has said in recent week that the US economic recovery has been “painfully slow” despite all the trillions of federal stimulus that have been spent to keep the market afloat and make it strong.
Now, however, the fraying at the edges is beginning to show. There is far less real growth in recent jobs reports than has been talked about in the media. While 200,000 jobs were added to the payroll in February, at least 200,000 jobs must be created each month just to keep up with the growth of the market.
Additionally, there is serious question in the housing market as news today indicates a serious shortfall between projections and performance in February. Despite all the attempts of the Federal Reserve to reinvigorate the housing market, it continues to falter. Pending home sales fell 0.5 percent in February, missing the market projections for growth of 0.5 percent.
Gold and silver perform well as hedges against risk in modern markets. Over the past few weeks, risk was perceived to be relatively low and investors began taking greater gambles with their moeny. This is one reason for the 2.8 percent correction in price we have seen in February as money that would have typically gone into the gold and silver markets was placed in risky instruments.
Additionally, a great deal of demand has been attributed, rightly or wrongly, to safe- haven investment buying. In a troubled market, money wants to find some solid ground to stand on and gold and silver provide that, particularly in a paper market inflated with $700 trillion of derivatives.
Now that the market is definitively turning per indication of the economic reports, the money is flowing back into gold and silver. Their coveted position as safe-haven assets cannot be questioned in the current market and will make gold and silver both the asset and investment of choice.
Senior Staff Writer – GoldSilver.org