Los Angeles, CA – Comex gold futures prices remained relatively stable following the FOMC statement on Wednesday. Federal Reserve chair Ben Bernanke announced that while no additional actions will be taken by the central bank, the Federal Reserve remains ready and willing to provide aid to the U.S. economy if needed. Gold traded slightly higher this week, up to $1644.00 an ounce. Silver traded slightly higher from Wednesday morning trading, moving up $0.20 to $30.71 an ounce.
Earlier Wednesday morning, the central bank’s policy-making Federal Open Market Committee (FOMC) reiterated its promise to keep interest rates at near-zero until the end of 2014. However, the statements given by the FOMC gave little additional guidance on whether it will take additional steps to boost economic growth in the later part of 2012.
In the statement, Federal Reserve chair Ben Bernanke elaborates:
“We remain entirely prepared to take additional balance sheet actions if necessary to achieve our objectives, so those tools remain very much on the table, and we would not hesitate to use them should the economy require that additional support.”
In addition, the Fed reported that orders for durable goods plunged 4.2% in March, marking the biggest drop since the contraction of the economy in early 2009. And while the economy appears to be expanding very slightly, the unemployment rate remains elevated at 8.2%. Former Fed governor Laurence Meyer commented after the meeting “if the economy plays out as expected and reflected in the [FOMC] forecast, they are not going to do anything [for now]. On the other hand, there’s some threshold, there’s some deterioration in the outlook that would motivate more aggressive moves.”
Bernanke also warned Congress it needs to reach an agreement to address economic shortfalls. With Bush-era tax cuts set to expire at the end of the year, Bernanke commented “if no action were to be taken by the fiscal authorities, the size of the fiscal cliff is such that there’s no chance that the Federal Reserve could or would have any ability whatsoever to offset that effect on the economy.”
At current, the economy’s direction has financial analysts uncertain as with the past year. In the Eurozone, while the immediate threat of a Greek bond default was averted, proactive measures to stabilize other troubled European countries such as Spain, Portugal, and Italy in the long term seem to be falling apart. Gold and other precious metals have and will continue to be an attractive safe-haven investment amid turbulent economies.
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