Gold and platinum prices jumped by more than $30 an ounce, silver prices by more than a dollar and palladium by more than $10 after the Federal Reserve issued a statement on Thursday promising $40 billion a month in mortgage debt purchases and continued asset purchases until jobs rebound.
“If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability,” the Fed statement following the Federal Open Market Committee meeting said..
The statement added that committee would not likely raise rates from current rock-bottom lows until at least mid-2015. Previously, it had set that guidance at late 2014.
The Fed is to issue new forecasts that analysts said could show softer projections for economic growth and higher unemployment, providing a rationale for the action, at 2 p.m. Eastern time and Fed Chairman Ben Bernanke is to hold a news conference at 2:15 p.m.
Precious metals mining stocks were also boosted by the Fed move with the NYSE ARCA Gold Bugs Index (HUI), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ) all up 4% and the Global X Silver Miners ETF (SIL) up 6%.
Phil Burgert is managing editor of ResourceInvestor.com. He can be contacted at firstname.lastname@example.org