“Most of the world’s central banks are trying to hold interest rates at or below the level of inflation. This strengthens the argument for buying gold because it means there is no opportunity cost for holding gold—in other words, investors aren’t going to be missing out because inflation is so low to begin with,” wrote iShares global chief investment strategist Russ Koesterich in a recent commentary. [The Case for Holding Gold ETFs]
In Friday’s speech, Bernanke said he’s still not happy with the strength of the U.S. economic recovery, and that the high unemployment rate remains a concern.
“Over the past five years, the Federal Reserve has acted to support economic growth and foster job creation, and it is important to achieve further progress, particularly in the labor market,” Bernanke said. “Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.”
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD.