Saturday, September 25, 2010

Sinai Says Fed's Sept. 21 Statement Means `Gotta Buy Gold'

From Bloomberg:

The Federal Reserve’s statement yesterday that inflation is below levels consistent with the central bank’s mandate for price stability means it’s time to buy gold, said Allen Sinai, chief global economist at Decision Economics Inc. in New York.

“That’s code for we don’t want to go the way of Japan so we’re going to print money,” Sinai said in a radio interview today on “Bloomberg Surveillance” with Tom Keene. “You gotta buy gold when those two central banks are doing what they’re doing.”

Gold for December delivery was 1.6 percent higher at $1,294.2 an ounce at 8:11 a.m. on the Comex in New York, after touching an all-time high $1,296.50. Bullion for immediate- delivery rose 0.4 percent to $1,292.60 an ounce in London, after earlier today rising to a record $1,295.

The Fed’s Open Market Committee said yesterday it was “prepared to provide additional accommodation if needed” to support the recovery and boost inflation. Gold, which often moves counter to the dollar, has advanced 17 percent this year and is heading for its tenth consecutive annual gain.

Sinai said he forecasts a $1,500 price for gold. “Inflation adjusted it’s still cheap as odd as it sounds,” he said.

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