Gold Prices Jump as Fed Announces QE3; Silver Prices also Surge
Gold prices rose sharply in trading on Thursday after the Silver prices also rose sharply on Thursday.
Gold surged after the Fed announced that it would purchase $40 billion of mortgage-backed debt each month. The Fed said that it will continue to purchase mortgage-backed debt until there is a significant improvement in the labor market.
Commenting on the Fed’s aggressive bond buying program, Axel Merk, Chief Investment Officer at Merk Funds, told Reuters that the Fed is emphasizing the growth mandate, and that means they don’t care about inflation other than giving lip service to it. Merk noted that the price of gold will do very well in the years to come.
Spot gold prices rose 2% to $1,766.40 an ounce on Thursday after hitting an intra-day high of $1,772.11 an ounce. Spot gold prices are now close to their 2012 high of $1,790 an ounce.
Gold futures for delivery in December on the Comex division of the New York Mercantile Exchange rose $38.40 to settle at $1,772.10 an ounce.
Silver prices also surged following the Fed announcement, gaining 4% to $34.59 an ounce.
In late trading on Thursday, the iShares Silver Trust (ETF) (NYSE: SLV) was trading 4.25% higher at $33.58, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was trading 8.37% higher at $59.05, and the ProShares UltraShort Silver Trust (ETF) (NYSE: ZSL) was trading 8.68% lower at $40.20.
Platinum and palladium also rose sharply. At last check, spot platinum was up 2.6% to $1,678.24 an ounce, while spot palladium was trading 2.1% higher at $685.22 an ounce.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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