Gold was the leading asset class for the first quarter of 2014. Although gold prices had struggled recently when this article was published, the metal still posted returns of 6%, outperforming the S&P 500 by nearly 5%. The article described that result as particularly notable because the Federal Reserve had reduced its monthly bond-buying program over the preceding three months, from $85 billion to $55 billion, while February’s jobs report had exceeded economists’ forecasts.
At the time of original publication, the article described the following: The March jobs report, scheduled at publication for Friday, April 4th, was described as a potential major influence on gold prices. A disappointing report could have suggested continued structural economic weakness and perhaps led the Federal Open Market Committee, or FOMC, to pause its bond-purchase tapering temporarily. On the other hand, a report stronger than expectations could have been read as confirmation that the FOMC’s course was appropriate, potentially encouraging it to continue or accelerate the tapering process.
The original article also identified several forthcoming influences that could have affected gold: slower Chinese economic activity, weakness in emerging markets, a sharp fall in home-mortgage applications, and later PMI readings. In addition, first-quarter GDP figures, expected shortly at the time of publication, were expected to offer a broader indication of the U.S. economy’s strength and resilience.
