[video] Quick Take: Gold Traders Eye Next Week's Fed Meeting
New York (TheStreet) -- Gold prices are 2.5% higher this week following weaker-than-expected economic reports, but will likely remain unchanged heading into next week's Federal Reserve policy meeting, according to TheStreet's Joe Deaux.
Andrew Chanin, co-founder of PureFunds, told Deaux the Fed might have something aside from tapering planned for the future.
While many market participants largely expect the Fed to taper at some point, Chanin suggested the Fed may actually increase its bond-buying stimulus program, based on a report from Societe Generale.
He added that tapering appears to be off the table since the economy isn't growing at a high enough rate -- especially not one that warrants the Fed backing out.
Based on the current environment, he suggested the odds of an increase in quantitative easing rather than a decrease are increasing.
As for gold prices, tapering appears to be priced in, according to Chanin. But what isn't priced in is an increase to the stimulus program. Should the Fed increase bond buying, it will drive prices of the yellow metal higher. The Fed's policy is what fueled prices higher a few years ago, he said.
Chanin concluded that gold has already priced in the downside move but has yet to price in the upside potential since an increase to stimulus is not a widely held view.
-- Written by Bret Kenwell in Petoskey, Mich.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV