Gold Rebound May Gather Pace As Speculation For QE3 Resurface

From the start of this week, gold pair is on the decrease, along with that spot prices are also moving to a low point $1,604/oz. sharp decline of billion may continue to retrace from a high point $1,921/oz, because the players are looking ahead of U.S dollar. Since the Federal Reserves are on the float, so the idea is to expand the balance sheet further. Let the speculation to be increased further, and for reserve currency, the trend should be bearish.
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Board member of FOMC Daniel Tarullo focused on renewing speculation for the quarter 3, and he insisted on purchasing the new assets. The federal government may look for widening the monetary policy because there is a risk factor involved due to double-recession impact. On the other hand, Fed president of St. Louis James Bullard suggested that Fed should look for quantitative easing under such intense economic conditions.

As a correspondence, the expectations are that Gold will be rebound for the short-lived purpose. This is needed from the central bank for the Q3 to fulfill the expectations. This could lead to the bullish trend in USD, and the rebound of bullion will go back to the previous month position. However, the current weakness of the greenback may continue its work for the coming week. This is because a cautious outlook is being maintained by the Fed of the world’s largest economy. As a result, the gold prices might go higher to above $1,700/oz.

Currently gold price is 1750.