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04 November 2010

Gold, Silver & Platinum all surge as market absorbs QE II news

Precious metals surge between 2% and 3% as Fed pledges to inject $600bn into US economy

Gold surged the most in 10 months today as the market took stock of quantitative easing measures announced by the federal reserve this week.

The Fed yesterday said it will buy an additional $600 billion of Treasuries through to June to spur growth. This was slightly (slightly being a relative term with these sorts of numbers) ahead of market expectations of $500 billion. Though hidden in the fine print was further $280 billion of easing in the form of $35 billion each month, for eight months, to purchase an additional Treasury's with proceeds from mortgage bonds.

The move had been expected by many analysts to boost precious metals, and almost as if trying to dampen the sentiment in the metals market during the build up to the release of QE news, we at had noted with interest a significant rise in anti Gold media stories from the usual suspects over the last week or so.

This PR offensive however appeared to have failed by Thursday lunch time in London, as Gold traded up around 2.5% at $1377 per troy ounce. Silver and Platinum were up nearly 3% at $25.50 and $1745 per troy ounce respectively.

Gold fixed in London at $1381 per troy ounce, which left premiums on physical coins and bars looking a little lower, though not as sharply down as one might expect, given the physical bar and coin markets time lag to react to price moves.

At time of writing, Fixed price 1 ounce Gold bars in the US were trading at 13.16% over gold fix in the United States.

Fixed price 1 ounce Silver was trading at 46.7% over silver fix.

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