The performance of gold obviously depends on the U.S. economic condition and the Fed’s future actions. In the short run, the end of QE3 will most likely not change anything and gold will most likely decline on a dollar rally.
Gold prices were 1% higher last week. Gold and silver rose to three week highs Friday after China cut benchmark interest rates to support economic growth, leading to demand for precious metals as a store of value.
One of the greatest fears this October has been the correlation between the S&P 500 Index’s ascent in the first three quarters of the year and the possible ramifications of the end of quantitative easing.