The Week In Hindsight, 28 February 2014
Gold prices set a new peak for 2014 early this week, pushing as high as $1345 before falling back to the $1320 mark ahead of the Friday close. The earlier price action was driven largely by heightened concerns over US economic data an anticipation of dovish remarks to come from Janet Yellen when she appeared before the Senate Banking Committee in Congress.
Unfortunately, these dovish warnings or statements of intent were not forthcoming from the new Chairwoman. During her testimony Yellen delivered the Bernanke mantra to perfection by iterating that monetary policy was “on no preset course”. This was shortly before stating that it would take a serious deterioration in the US economic outlook for the FOMC to consider scrapping, or even altering, its tapering program.
The metal fell lower during the final stages of the week in response to this, remaining undeterred in its correction by the downward revision to US Q4GDP. As many will already expect, our outlook for gold remains unchanged.