Gold Pares Recent Gains; Triland Sees ‘Next Leg Up In Gold’s Secular Bull Run’

By Allen Sykora of Kitco News

Friday September 20, 2013 1:15 PM

Precious metals Friday gave up roughly half of the gains made this week following the surprise announcement from the Federal Reserve that it will maintain the current pace of its asset-purchasing program. As of early afternoon in New York, Comex August gold was down $36.10, or $2.6%, to $1,333.20 an ounce. 

Volume has been high for a Friday, Triland Metals says. “It is important to step back from these short term knee-jerk reactions to the bigger picture,” Triland says.

“The inflexion point of QE (quantitative-easing) program activity was in late 2012 and the gold market reacted accordingly; ultimately following April's large flush-out, gold has priced in a reduction in the pace of the program already. Whilst the tapering of stimulus is highly likely at some point in the next few Fed meetings, it is the sensitivity of the wider markets to these announcements that is the most alarming. The wider press is also now realizing the house-of-cards scenario that QE has created -- inflating the assets of the very rich to artificially high levels and keeping borrowing costs un-naturally low for prolonged periods of time. It seems that the Fed will have a tough time reducing these purchases, let alone reducing the monetary base; something that they need to do if they want to control inflation that is round the corner. The perfect storm for the next leg up in gold's secular bull run (see back to 1971 Nixon shock) is brewing.” 

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