This Month in Gold – May 2012

Bernanke: Fed Stands Ready to Do More
The Wall Street Journal – Federal Reserve Chairman Ben Bernanke reaffirmed the ‘Bernanke put’ this month, otherwise known as music to the ears of precious metals investors. Appearing after the Fed’s latest rate-setting meeting, Bernanke said that another round of bond purchases remains “very much on the table and we will not hesitate to use them should the economy require that additional support.” Bernanke cited a weak employment picture and general uncertainty about the US and world economies as support for his activist posture.
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IMF: Mexico, Russia & Turkey Add Gold to Reserves in March
Bloomberg – Emerging market central banks added more gold to their reserve holdings in March, the International Monetary Fund reports. Mexico led the pack, adding 16.8 tons of bullion, valued at US$906.4 million (just shy of a bullion billion). Russia similarly added 16.5 tons of bullion, Turkey added 11.5 tons, Kazakhstan added 4.3 tons, and Ukraine added 1.2 tons. The purchases continue the trend among emerging market central banks to diversify their reserve holdings away from the paper currencies of developed markets. Emerging market central banks also tend to only hold a small fraction of their reserves in gold as compared to their developed world counterparts, so analysts expect that diversification trend has plenty of room to grow.
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Fed Vice Chair: Printing Press May Continue after 2014
The New York Times – Math says the Federal Reserve cannot raise interest rates from near-zero before late 2014 without crippling the US economy. Janet Yellen, the agency’s No. 2 and a close ally of Chairman Ben Bernanke, admitted as much in a speech in Manhattan in early April. Citing a lackluster recovery and an underperforming labor market, Yellen laid the groundwork for a yet another extension of zero-rate policy, and argued that if anything, “there has been a significant shortfall in the overall amount of monetary policy stimulus since early 2009.” Yellen suggested that late 2015 might instead be a more appropriate time to start raising interest rates.
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Time to Mine Precious Metals in Space?
CBS News – Precious metals at today’s elevated prices create mining opportunities in unconventional places. Space tourism pioneers Eric Anderson and Peter Diamandis, owners of Planetary Resources, with the backing of deep-pocket investors Larry Page of Google and filmmaker James Cameron, hope to mine near-earth asteroids soon. “This company is not about thinking and dreaming about asteroid mining,” Anderson claims. “This company is about creating a space economy beyond the earth.” Prospecting is scheduled to begin in 2020.
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