Gold fell below the $1300 level in its initial reaction to the Fed’s balance sheet reduction program. Silver followed suit. Gold was down $9 today at $1301. Silver was down 14¢ at $17.15. In early Asian trading gold and silver are both level.
There is a sense of finality in the Fed’s actions today – the end of the easy money era. It comes at time when disinflation is deeply entrenched in the U.S. economy and deflation is quietly knocking on the door. Looking at the range of markets, we would classify today’s overall reaction as tepid at best.
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For more on today’s events, please scroll below.
Quote of the Day
“It’s just finally sinking in. The Fed has a credibility issue, even if you think they were going to follow through on their guidance, part of you didn’t believe it. Now, more and more people are starting to piece it together. What will be the impact on yield as money is destroyed and eliminated from the financial system?” – Bryce Doty, senior fixed income manager with Sit Investment Associates.
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