Bernanke says nothing, so gold does it for him

Ben Bernanke kept his cards close to his chest today in terms of policy decisions to fix sluggish growth and to ease unemployment with no significant mention of further monetary easing as some had expected. The problem with saying little is that it leaves it open for others to interpret that for you. Since his speech gold has edged higher as has the VIX Index which suggests to us that the markets are not seeing his speech in a favorable light.

There are two readings of Bernanke's coyness - either he prefers to keep his powder dry or else he wants to leave it to Washington (which are arguably as political as they are economic in nature) to make those decisions. That would be a mistake. The world has had to witness the dysfunctional decision making between Democrats and Republicans on raising the debt-ceiling only a month ago and we could do without a re-run of that brinkmanship again.

At the time writing the VIX is up 3.14% on the day to 42.90 while gold is up $12 or 0.67% at $1785.

About the Author
Ross Norman

Ross Norman is owner and chief executive officer of the London-based gold broker Sharps Pixley Ltd.

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