Gold and Fed Taper’s Unintended Consequences

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Jan. 29 (Bloomberg) -- Bloomberg's Alix Steel and Bloomberg Industries’ Kenneth Hoffman put futures in focus with a look at gold in "On The Markets" on Bloomberg Television's "In The Loop."

That is a negative for gold.

Explain why gold is up?

A funny thing happened on the way to taper.

The problem has become, taper happens, and then all of a sudden one by one emerging economies using the money to fund their economies found themselves in big trouble.

Argentina had huge problems.

That spread to venezuela.

Turkey having problems.

Central banks who come back at our raising interest rates.

Real rates is a nail in the coffin for gold.

You would think that as well, but look at turkey.

They raise the interest rates like crazy but has a very short- term effect.

The turkish lira are having all sorts of problems.

They are running for the hill and all of these areas and when they run they go to gold.

We are only of $13. why isn't it out more at this point?

I think the jury is saying how many tapers does it take to really cause a problem?

That will be the issue.

If they taper again, what if we see more emerging economies have problems that go then we will see gold continue to do well.

Of course be emerging-market currencies fell off and we see the turmoil.

That actually help the dollar.

What is the effective of that on gold?

U.s. dolly -- dollar rallying is very good, but imagine if you are in turkey, would you rather own gold or the local currency?

Those people are buying gold a lot.

Hold it safe haven, dollars safe haven.

They are all safe havens in the markets and that is why they are doing well.

The pivotal point is want white doesn't cause more havoc and i want -- what point does it cause peace?


I think that is what people are really focusing on.

Taper on its own it seems like a negative to the market.

The market is taking a pause, singing will it have unintended consequences we did not anticipate?

My last question, we have seen these firms lowered their forecast by 12% to 11.60. will we see these guys rethink strategy when it comes to gold?

Gold keeps going higher, i think they probably will.

They are all saying this seemed like a slamdunk.

That will be the big question going forward.

Watch the emerging economies.

I think you.

Really appreciate it.

This text has been automatically generated. It may not be 100% accurate.


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