New Gold Inc. (USA) (NYSEMKT:NGD) Surges As Fed Cuts Stimulus

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Dallas, Texas 01/31/2014 (FINANCIALSTRENDS) – New Gold Inc. (USA) (NYSEMKT:NGD) gained 1.37% on Wednesday, in line with the broader market gain of the gold mining stocks. During the week, gold went down enormously on concerns of Fed’s tapering measures and currency pressure in the emerging markets. But, the scenario turned in favor of gold as investors turned their bet on the yellow metal.

Fed Cuts Stimulus

The US Federal Reserve, as expected, has further cut down its stimulus and the emerging market currencies showed weakness even after Turkey and South Africa’s, raised the interest rates but fall short to motivate the market sentiments. The money came into the US treasuries, Japanese Yen and gold and they reigned the day as the global equity market drifted down. According to executive Vice President at Dillion

Gage Metals, Roy Friedman, the pressure travelling in the emerging markets should not be considered lightly, as it could have far worse implications than thought. According to him, for the time being, till these markets do not get stability, the investor’s could continue to exit the equities in favor of metals.

Pull Back After A Long Slump

The gold surge came after a long time of sluggishness in the gold prices, the reason being the expectation that improving global economical scenario will lead Fed to scale down its stimulus, thereby, limiting the demand for gold as a hedge. But, contrary to the early times, Fed’s stimulus cut did not let the gold fall down. Fed has announced $10 million cut in bond buyback, from $75 billion in January to $65 billion in February. According to the experts, Fed’s moves have already been factored into the price before and they rule out any major fall coming.

New Gold Inc. will lead the earnings season and is set to present its fourth quarter and full year earnings next week.

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