By Tom Jennemann:New York 04/11/2010 - Gold on the Comex division of the New York Mercantile Exchange rode a bullish wave Thursday as the Fed's quantitative easing (QE2) announcement bruised the dollar and pushed investors into commodities.
Gold futures for December delivery closed up $45.50 to $1,383.10 an ounce, or up 3.4 percent, which marks the single biggest daily gain in 20 months.
Yesterday, the Federal Open Market Committee (FOMC) announced its intentions to purchase an additional $600 billion in Treasury bonds at a pace of $75 million per month through the second quarter of 2011.
The central bank will also reinvest an additional $250-$300 billion in Treasurys with the proceeds from mortgage-related holdings. That puts the total asset purchases in the range of $850-$900 billion, which met or even exceeded market expectations.
"Traders see that the Fed is piling on more debt so there has been a flight to quality that backs up what the gold bugs have been saying all along. This was also an appreciating asset trade as gold has outperformed equities this year," Young said.......read in full
No comments:
Post a Comment