December Meeting, Fiscal Cliff & the New Year

Minutes from the December meeting were released yesterday, which added $45 billion of Treasury purchases to QE and saw a change to threshold-based guidance on interest rates, which suggests FOMC members expect QE will not last beyond the end of 2013.

Who really believes this?

Ben Bernanke hinted throughout the press conference that the decisions will be made based on:

  • Wider range of labour market indicators 
  •  Interest rate differentials 
  •  Falling participation of employment 

If QE would halt, that would be perceived negative for the equity market.

In the United States, it was reported this morning that Payrolls climbed 155,000 as the Jobless Rate Held at 7.8%

Here at home, Canada’s economy created far more jobs than expected. The economy added 39,800 jobs in December from November, well above the expected 5,000 jobs. Although the numbers could be skewed because of the busy retail season in December.

The “fiscal cliff” story seems to somehow have died down even though no real resolution has surfaced; and next you will hear about the “debt ceiling”. The U.S. will need to act dramatically to avoid a default.

This could have very positive consequences for the precious metals market. We expect volatility into the beginning of 2013 as it was at the end of 2012. Managing your precious metals holding is of utmost importance and timing your opportunities is crucial.

This is our 1st weekly recap of 2013 and we want to wish you a very Happy New Year!