
(Photo Credit to: Bloomberg.com)
Since the Federal Open Market Committee minutes were released precious metals like gold and silver have been benefiting greatly from the commotion and rumors. While we have given you a Gold Outlook for 2013, much has happened in recent weeks. Consider this a gold outlook update, providing you with the recent changes and weekly progressions since our last post. We’ll take a look at what affected the precious metals market, current risks and even a little treat! This time around, we were able to get a hold of the ever-busy Michael Killian, co-owner/co-founder of Stock, Rock, and Roll to give us his input on the current gold market. So as you are easing into work this morning, catching this during your lunch break, or surfing the web under company time, take a look at the latest gold outlook update!
Gold Outlook Update: Current Standings

(Photo Credit to: BusinessInsider.com)
Since posting our last few gold outlook articles, including Gold Outlook for 2013 and Gold Stocks, Who’s Hurting, Who’s Flourishing, and What’s Next, the precious metal has been riding a three-week high. We’ve recently been witnessing stronger levels and higher rallying gains. In the past week gold prices rallied 4.9% which has been the biggest gainer since October 2011. Even gold futures spiked 2.6% after Federal Reserve Chairman Ben Bernanke stated their highly accommodating monetary policy will be needed for the ‘foreseeable future’ citing low levels of inflation. We’ll look into Bernanke’s other remarks throughout this post, for now let’s see other gold trading updates. It’s good to see the gold outlook on a positive note, although it will most likely not last too much longer.
How the FOMC Minutes Affected Precious Metals
In the last week the Federal Open Market Committee released the minutes from their most recent meeting. Key points addressed included the asset purchase program and future plans for the Federal Reserve. While many of Bernanke’s comments were broad, they were still enough to affect the precious metals market. While the Federal Reserve leaves their monetary policy unchanged, the minutes and press conference had Bernanke foreshadowing a taper initiation for the asset purchase program by the end of 2013 concluding by mid 2014 if the economy continues to pick up as the Central Bank expects.
The asset purchase program actually caused some conflict within the committee as it was almost an equal split down the middle of those for the initiation and those against it. Half of the committee feels the state is still too weak, and it’s too early to start wrapping this program up. The other half feels its time to start preparing by scaling back purchases to avoid any potential negative consequences of the program, ensuring they do no exceed the anticipated benefits. They’ve seen how there’s been a decline in the unemployment rate since last September and the ongoing increases in private payroll. With the labor market improving, policymakers for the taper are confident with it’s initiation.

(Photo Credit to: WashingtonPost.com)
While Bernanke and the Federal Reserve continue to debate the fate of the asset purchase program, members did agree that they will shed some light on their monetary policies in coming months, especially after Bernanke’s collection of broad and vague statements.
Bernanke himself can be seen as somewhat contradictory, as some even refer to his remarks as “dovish.” In the past few weeks as the focus was on the FOMC, Bernanke has flip-flopped back and forth between hinting at the start of a taper in addition to says the economy still had a long way to go and will require much more easing. Though some scratched their heads over these comments, his tone was definitely enough to affect Forex and Precious Metals markets. Thankfully it was in a positive regard, but what is Bernanke’s final consensus? Is he for the taper or not?
Should I Invest in Gold? Michael Killian’s Opinion
Since our last gold post, I was able to catch up with the knowledgeable co-founder of Stock, Rock, and Roll, Michael Killian. I wanted to pick his brain and see what his thoughts were with the FOMC and Bernanke’s role in the precious metals market and his opinion on investing in gold. After this recent gold outlook update, should you invest or hold off?

(Photo Credit to: Bloomberg.com)
As we discussed the FOMC’s last meeting, Killian said,”…it seems like the economy has taken a step for the better. As a result, the U.S dollar is expected to increase in value.” He went on to explain how interested rates have increased and in turn yielding higher monetary returns to banks. He projects that in coming months the stock market should be doing better than it has been.
Following the FOMC I asked Killian if he would invest in gold or other precious metals at this time. In response he profoundly said, “There’s a saying, ‘buy the dip.’ The best time to buy is usually when everyone else is selling – especially with a hard asset like gold.” Of course, this statement refers to supply and demand. In the case of precious metals there is always a limited supply of these commodities in addition to a continuous demand.
“I think gold is a great investment at the moment,” Killian continues, “the upside potential surely outweighs the risk at the moment. In the short-term, prices will probably stay in the $1,200-$1,300 range for a while. As a long-term investment, gold is likely to rebound to previous highs.”
If you are looking for a quick-flip situation, this commodity is not for you. For those of you who have the ability to sit on an investment like gold for a while, you will more than likely reap the benefits as gold begins to rebound. As we concluded our conversation, Killian concluded by stating, “Now is a good time to capitalize on the low price of precious metals.”
Gold Outlook Update Wrap-Up
Well, it’s apparent that much has happened since our last gold post. While the FOMC’s committee attempts to find some middle ground in future meetings we can also expect a specific plan as to how they will approach their monetary policies from now on. Bernanke’s comments are still unclear, though we should be able to identify his side in coming weeks. For those of you debating on investing in gold, you heard it from a seasoned stock professional. As Killian said, ‘buy the dip’ and take action while everyone is selling and benefit from the low prices. Just remember you have to be willing to hold onto these investments with a long-term mindset!
What do you think? Will you invest in gold? What are your thoughts about Michael Killian’s remarks? Let us know!
Stay up to date on 2013’s gold outlook by getting on our FREE eMail list!