Fed holding rates low until late 2014 a major boost for gold prices says Jim Sinclair
Posted on 26 January 2012 with no comments from readers
The world’s most respected gold trader Jim Sinclair, a veteran of the 1970s boom believes that the announcement by Fed chairman Ben Bernanke that interest rates will be kept at their historic low until the end of 2014 is ‘an important day for gold’.
Both gold and silver prices jumped sharply after the statement with gold now well above $1,700 and silver $33 an ounce. Mr Sinclair sees this as a major indicator of the quantity of money printing to come which will send the prices of precious metals much higher.
Important day
He told KingWorldNews.com: ‘Today is an important day. There are many days we talk but this is a mile-marker. What the Fed did today is they turned on the light of what will be QE to infinity. Today the light went on with regards to the intentions of the Fed. They did that for very specific reasons, we have troubles people can’t see and this is one of the ways out.’
Mr Sinclair reckons that this message is not going to be lost on any person or institution currently holding cash. The devaluation and debasement of the US dollar is being explicitly targeted by the Fed and they are putting a date on it.
‘I think you are going to see a very significant change amongst investors, corporations and companies with extra capital and people of the mainstream,’ he said. ‘You’re going to find gold being accepted as a hedge against what’s going on by entities, that up to now, you would think would be the last ones to be buying gold. How about someone like General Electric?
GE gold?
‘I used GE as an example because the principal of GE is a major advisor to the government. That would be the most unlikely thing for GE to buy gold. But don’t count it out. You are going to see a lot of things this year you thought at one time impossible, becoming reality.’
Mr Sinclair’s predictions on the gold price have been consistently accurate with the rare exception of the 2008-9 price correction, although that too only proved to be a bump on the road to higher prices. He sees gold prices heading north of $5,000 an ounce.
