Gold and silver were both able to make small gains in the early morning hours of Wednesday as Ben Bernanke’s speech’s prepared text was released, mulled over, and digested by most of the marketplace. As investors are well aware, Bernanke is set to address the US House of Representatives later this afternoon regarding the US economy and the future of monetary policy.
The US Dollar Index was a bit lower again Wednesday morning which helped gold move forward for the second day in a row. So long as the US Dollar Index remains subdued gold and silver will be able to make at least partial moves forward. Unfortunately, it seems as though precious metals are willing to fall at a much higher rate than they are making gains which is why it seems like spot values have been so low for so long.
Bernanke’s Prepared Text
Though the actual speech is not set to take place until later in the afternoon, the bulk of what Bernanke is going to say has already been released this morning. The overriding theme of Bernanke’s address seems to be that him and the Fed are intent on hanging on to their flexible policies, at least for now.
Quite contrary to what most people are thinking is the part of the prepared text where Bernanke indicated that if economic conditions took a turn for the worse any time soon the Fed is not going to shy away from boosting Quantitative Easing, or monthly bond-buying.
These remarks fall in line with what has been stated very recently. Bernanke even went on to say that there is no set timetable for when QE will be done away with. QE’s future is very much contingent on the way the US economy acts in the coming months, or so it seems.
Though his prepared text has already been released, he is set to speak later in the morning for real and at this point we could find out additional information regarding monetary policy, specifically QE.
Other News
European stocks took a bit of a downward dive on news of Bernanke’s prepared text as it seems to be adversarial to equities.
Asian stocks, on the other hand, experienced mixed results as trading was mostly subdued in preparation for Bernanke’s speech.
By the end of today we will find out for sure if Bernanke’s remarks are good or bad for the prospects of gold and silver going further.