Federal Reserve Chairman, Ben Bernanke addressed Congress in the first week of February 2012. His speech concerned the volatile financial situation in the euro zone, and possible steps to protect the US economy from its fallout. Nowhere in his testimony did Bernanke speak about improvement in the US economy. Nor did he make any overtures about the lessening of quantitative easing.
Bernanke’s non-committal discourse appeared to have a contrary effect on precious metals and US currency, as late trading saw the dollar drop against the Euro. Both gold and silver advanced after early declines. Mining stocks, physical metals, precious metals trusts and futures all saw rises in valuation as the Fed chairman spoke.
Precious metals market sentiment obviously took Bernanke’s words as an indicator of little improvement in the US economy overall, and a signal that uncertainty about a potential Greek bailout remains a concern. Although employment numbers showed improvement over expectations, most interpreted Bernanke’s failure to mention it as another step toward increased fiscal stimulus. Mr. Bernanke may do well to include silver and gold in his personal investment portfolio.
