Bernanke delivers last of four-part lecture series

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In March 2012, Chairman Ben S. Bernanke will deliver a four-part lecture series about the Federal Reserve and the financial crisis that emerged in 2007. The series begins with a lecture on the origins and missions of central banks, followed by a lecture that will discuss the role and actions of the Federal Reserve in the period after World War II. In the final two lectures, the Chairman will review some of the causes of, and policy responses to, the recent financial crisis, focusing specifically on the actions of the Federal Reserve.

The lectures are being offered as part of an undergraduate course Leaving the Board at the George Washington University School of Business.

Live video of each lecture will be available to the public athttp://www.ustream.tv/federalreserve Leaving the Board. Transcripts and video recordings will be made available following each lecture.

Related reading list (PDF)

Lecture 1: Origins and Mission of the Federal Reserve

Watch live on March 20, 2012 12:45 p.m. ET

Lecture 2: The Federal Reserve after World War II

Watch live on March 22, 2012 12:45 p.m. ET

Lecture 3: The Federal Reserve’s Response to the Financial Crisis


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Still far off the record price for gold, the precious metal started rising at $1674.90 per ounce. The record, $1,923.70 per ounce, which was established in early September of last year is still in sight for some investors despite fluctuation in the other markets..

For the first time in four weeks, the precious metal achieved a weekly gain last week, rising 0.02 percent. The best weekly performance since the end of last month was prompted by losses to the U.S. dollar and increases to the price of crude oil.

Losses for gold thus far this month amount to about 2.8 percent but Monday could be a turn about. The catalyst for the rise in the gold price was comments from Federal Reserve Chairman Ben Bernanke, who hinted at further monetary easing in a speech this morning.

At the National Association for Business Economics Annual Conference, Bernanke stated that “further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.”

On Friday the gold price finished the week on an up note, climbing $20.01, or 1.2%, to $1,663.00 per ounce.  The advance marked the best day for the price of gold since March 1 and brought the yellow metal back into positive territory for the week.  However, last Thursday the gold price fell to a nine-week low of $1,627.50 and remains lower in March by 1.8%.

Gold Update

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The price of gold fell by 1 percent on Thursday to its lowest level since mid-January. Spot gold fell by as much as $1,631.74 an ounce, against a backdrop of a strengthening dollar, soft consumer demand in Asia and weakening investor appetite for the metal.

Shares of U.K.-listed mining group Randgold Resources sank 14% in London on Thursday following a military coup in Mali, where the company has operations. Media reports said soldiers from the Malian army stormed state television and suspended the country’s constitution and state institutions amid anger over the government handling of a rebellion in the north by Tuareg separatists. Reportedly, that rebellion has caused the deaths of many soldiers. Media reports said the whereabouts of President Amadou Toumani Toure were presently unknown. A spokesman from Randgold said the company was preparing a statement related to the situation in Mali.

Commodity prices fell broadly Tuesday as more evidence of China’s slowing economy renewed concerns about future demand for everything from oil and copper to soybeans and gold.

Housing prices dropped in 45 Chinese cities in February, partly because of government measures to ease property speculation. China also raised the price of gasoline for the second time in two months, which could diminish demand.

Gold Price, Commodities Fall On China Outlook

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Commodity prices fell broadly Tuesday as more evidence of China’s slowing economy renewed concerns about future demand for everything from oil and copper to soybeans and gold.

China has been a major buyer of iron ore, which is used in steelmaking, as it has ramped up infrastructure projects like roads, airports, factories and housing.

News that affects the pace of China’s growth can have a significant impact on commodity prices because China is a major importer of raw materials to drive the world’s second-largest economy.

China’s rapid growth has slowed in the past year because of government measures designed to prevent the economy from overheating. Its economic growth was 8.9 percent in the final quarter of 2011, compared with double-digit expansion the previous year. The government has set a growth target of 7.5 percent for 2012.

The developments from China gave some commodities investors a chance to sell holdings for profits, Kingsview Financial analyst Matt Zeman said.

“I don’t think we’re going to see any real broad sell-off,” he said. “I think that people are going to look more at these little pullbacks as buying opportunities than anything else.”

In metals trading, the price of copper was held down by a mixed housing report. The Commerce Department said builders broke ground on fewer homes in February but obtained more permits to build homes later in the year.

Copper for May delivery fell 7.85 cents, or 2 percent, to finish at $3.8305 per pound, and silver fell $1.121, or 3.4 percent, to $31.834 per ounce. April platinum fell $30.40 to finish a $1,654.30 an ounce and June palladium dropped $10.55 to $697.05 per ounce.

April gold fell $20.30 to end at $1,647 per ounce. Gold prices have fallen nearly 8 percent since the end of February.

Oil prices fell on concerns about China’s economy and a promise from Saudi Arabia to fulfill any shortfalls in global oil supplies that may occur from a standoff over Iran’s nuclear program.

Benchmark oil fell $2.48 to finish at $105.61 per barrel on the New York Mercantile Exchange. Heating oil fell 2.46 cents to end at $3.2367 per gallon, gasoline futures declined 0.47 cent to $3.3631 per gallon and natural gas ended down 1.6 cents at $2.335 per 1,000 cubic feet.

India’s Gold Buying Starting To Decline

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India, world’s largest gold consumer, has made a significant foot step away from gold when it’s Economic Survey said imports of gold and consumer goods unproductive, observers said.

They said gold imports are a large contributor to India’s current account deficit, which is estimated at 3.6% of gross domestic product in the current fiscal year that ends March 31.

By restricting gold imports, India’s savings can be directed to more productive assets, they added. The large current account gap is seen as the biggest pressure on the Indian rupee’s performance.

The country has already imported about $60 billion of gold between last April and February.

However, India’s imports of gold have already started falling. According to data from the World Gold Council, the country’s import of the commodity fell from 298 tonnes in the January-March 2011 quarter to 157 tonnes in the October-December 2011 quarter.

It is likely to fall significantly in 2012 as the government’s decision to double import duty to 4% is seen squeezing local demand, especially for jewellery, industry officials said.

According to a report of the Prime Minister’s Economic Council (PMEAC), the country’s total gold imports during 2011-12 is likely to touch $58 billion. This would form a sizeable part of the rising current account deficit, which was at $32.8 billion in the first half of 2011-12.

India imported a record 969 tonne of gold in 201.

Possible $1550 Price?

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The fall in the price of gold has prompted one or more central banks to buy as much as four tonnes of bullion in recent weeks, according to an industry source and a Financial Times report on Friday.

The purchases, worth about $250 million (157.77 million pounds) at current prices, were made through the Bank for International Settlements (BIS), a source reportedly told Reuters.

The identity of the buyers is not disclosed until the BIShas allocated the gold. Its quite possible the buyers are likely to be in Asia, where banks are keen to diversify their dollar-heavy foreign exchange reserves, the source told Reuters. The Philippines and Thailand were big buyers last year.

Citing several traders with knowledge of the transactions, it said purchases were particularly strong at the end of the week and the total over the past three or four weeks was likely to be as much as double that range.

A Credit Suisse note to clients this week referred to “aggressive central bank buying seen last Friday”, the FT said.

But another Swiss investment bank UBS, has downgraded its one- and three-month forecasts for gold in expectations of a sustainable global economic recovery, especially in the US.

The bank expects gold prices to average $1,550 in the next one month, almost 13 per cent lower from a previous forecast of $1,775 per ounce, while it has lowered its three-month forecast by an even steeper 18 per cent, from a previous forecast of $1,950 per ounce to $1,600 per ounce.

Spot gold prices fell to around $1,650 per ounce again this morning on signs of a sustainable economic recovery in the US and around the globe.

The buying started when bullion dropped to levels considered “attractive”, the source told Reuters. Banks are likely to step into the market again if prices fall further, he said.

Bullion has fallen 8 percent since February 28, the day before prices saw their biggest one-day drop in more than three years, and are about 14 percent below their record highs of $1,920 per oz hit in September.

Even so, they are also well off the lows of $1,521 per oz seen in December last year.

Central bank buying, led by emerging economies, has been a trend of the past several years. In 2011, central banks were net buyers for a second year in a row.

Their purchases soared to 439.7 tonnes last year from 77 tonnes, reflecting the need to diversify assets, reduce reliance on one or two foreign currencies, rebalance reserves and ultimately protect national wealth, according to the World Gold Council (WGC).

Gold – TGIF!

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Thank God its Friday! I’m sure gold is looking forward to a breather over the weekend as it has been a rough week for the so called safe-haven assets in the market. Gold and U.S. Treasuries have taken quite a beating amid the improved investor risk appetite in the market place.

India, the world’s biggest bullion buyer, increased the tax on gold imports for the second time this year after record purchases widened the current-account deficit. Gold for immediately delivery fell.

The government will tax gold bars and coins and platinum at 4 percent, Pranab Mukherjee, finance minister, said in his budget speech for the year starting April 1. That’s up from 2 percent set in January. There was no change on the silver tax.

The price of gold was lower Friday morning at $1651 an ounce  and heading for a third straight week of losses as a brightening economic outlook in the United States prompted investors to park their money elsewhere.

In January, India raised the gold import duty 90 percent and doubled the tax on silver as the government grappled with a burgeoning fiscal deficit and looked to increase revenues. Increasing outlays that include subsidies for fuel and food have left the coalition government struggling to meet its fiscal deficit target.

Dealers reported a 7 percent drop in gold prices since late February could also spur buying from jewellers in other regions. Gold hit a low of $1,634.09 on Wednesday, its weakest since Jan. 16, on fading expectations of more monetary easing in the United States, which reduces the money available to buy safe-haven assets.

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