“Jeffrey Nichols, Senior Economic Advisor to Rosland Capital (www.roslandcapital.com), had the following comments on the current gold-market situation and outlook:
I’ve been surprised by the recent decline in the price of gold. I expected a stronger finish to the first quarter with gold somewhat higher – possibly even breaking out above the $1,400 an ounce level by the end of March – but this will now have to wait.
Two recent developments shifted trader expectations and triggered the recent round of selling:
First, Russia’s annexation of Crimea failed to provoke any serious response from the West. Neither the United States nor the European Union reacted with any serious economic or political sanctions . . . and the outmanned Ukraine military has stood down, avoiding a shooting match with Russian forces.
Second, expectations of future U.S. Federal Reserve policy also shifted. The Fed’s announcement following its late-March policy-setting meeting that it would continue to “taper” its monthly bond-buying program with another $10 billion reduction in April purchases was widely anticipated. ”