Market stops Yellin' for gold
Washington (Mar 29) Janet Yellen, in her first meeting as chairwoman of the Federal Reserve last week, indicated the Fed would continue to reduce stimulus and could be on track to start raising interest rates in the near future. In response, gold prices have collapsed, losing more than $100 per ounce.
The Federal Reserve, through a series of programs, have lowered short-term interest rates to near zero and have pulled down long-term rates as well, making it less expensive to borrow money. Although these measures made mortgages and other loans cheaper, it also sparked fears that inflation could accelerate, which helped push gold over $1,900 per ounce in 2011.
Yellen's most recent announcement was taken as negative for gold, which hammered the metal down to $1,286 yesterday, a six-week low.
Despite the potential bearish influences from the Fed, other gold investors are closely watching the situation in Ukraine. With as many as 50,000 Russian troops poised on the Ukrainian border, some market watchers believe war could be brewing, which could cause global investors to flock towards the perceived safety of gold.