For the Fed's meeting, gold investors will watch out for the conditions under which the bond purchases will be reduced, the Fed's outlook for the interest rates as well as the Fed's projections of the inflation and the unemployment rate.
Perhaps the most bullish news for gold so far this year has been the spate of downward revisions to the price forecasts proffered by many of the major banking firms, dealers, trading houses, and other institutional participants in the gold scene.
Negativity persists among investors, as evidenced by the ongoing stream of money leaving equity funds into bond funds. It’s challenging to pinpoint the origin of the pessimism because it comes from all over the globe.
It was the launch of exchange traded funds that gave the gold price a huge hike in the last decade. Now China is poised to launch its first gold ETFs bringing this easy way to own gold to its population of 1.3 billion.
The Shanghai Composite Index and Bombay Sensex are currently at one-year lows, indicating that investors are not feeling confident even in these relatively strong markets where GDP is growing. In this environment, gold is the "sole beneficiary."
Russia has effectively recoupled with the other BRIC countries after the Russian economy lagged out-of-the-gate once the global recovery began, leading some to question whether it belonged in the same category as Brazil, China and India.