Gold Price Decline Caused by Over-Reaction To QE Plans

Plummeting gold prices reflect unrealistic expectations about the end of quanitative easing (QE) according to a new report from Sterne Agee. While the Federal Reserve is looking to move away from its policy of maintaining a zero percent interest rate, analysts expect this transition to last for years as the Fed has many reasons to move slowly.

Gold prices have been dropping since Federal Reserve Chairmen Ben Bernanke held a press conference in June where he hinted that he would begin tapering QE in the coming months. The Federal Open Market...