Gold Ticks Up on Fed Decision to Continue QE
Minutes of the Federal Open Market Committee posted on Twitter about 11:25 am PST show that the Fed will continue its $85-billion a month bond-buying program known as quantitative easing. According to the statement:
“To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.”
The Fed says QE is necessary to keep downward pressure on interest rates and support mortgage markets.
Gold has been trending down in the past few sessions, with investors jittery that the Fed would make a decision to scale back the program, which has been bullish for gold, due to improving economic conditions in the United States. On Tuesday gold sank to a monthly low of $1,360/oz.
As to how long QE could continue, the FOMC said today that “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.”
Gold was up slightly following the dovish decision taken by the Fed. Reuters reported spot gold climbed 0.5 percent to $1,376 an ounce, while US gold futures gained $7.10 to close at $1,374. |
