GLD: Will This ETF Bounce Back?

The weakness in the gold market has also reflected in the fall in the price of SPDR Gold (GLD) – the ETF lost 5% during September. Will GLD recover from its recent fall? Let’s review the latest developments related to GLD such as the recent FOMC meeting and examine what’s next for GLD in the short term.

Last week, the FOMC, as expected, tapered QE3 by another $10 billion. The asset purchase program is currently set at $15 billion a month. In the press conference, Chair Yellen stated the purchase program will end in October.

The slightly more hawkish tone in the FOMC statement seems to have had a modest adverse impact on GLD, as presented in the table above. Moreover, except for the June meeting, following the other meetings this year GLD had a negative reaction to them – this could indicate the slow turn of the tone in the FOMC meetings towards to hawkish side may have also slowly dragged down GLD.

So what hasn’t changed in the last meeting?

The term “considerable time” remained in the wording of the FOMC’s statement; in the press conference Chair Yellen didn’t offer a clear definition for the time frame for the next rate hike.

The rest of this analysis is at Seeking Alpha

So what has changed?

For one, another member of the FOMC thought it’s high time to provide more guidance about the timing of the rate hike. This time, Richard Fisher joined Charles Plosser to vote against the policy action as explained in the statement.

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