Gold surged to its highest price in a week today, following the U.S. Federal Reserves announcement that it will continue to print money and not pursue a tapering right now of its massive $85 million bond buyback program, reported USA Today.
“Gold bugs were called back into action Thursday as the market digests the fact the Federal Reserve didn't scale back quantitative easing as widely expected,” wrote the paper’s Matt Krantz.
Gold futures for December trading rose by 4.6 percent to hit $1,367.70 on the Comex in New York. Bloomberg reported that this was the largest percentage jump since 2009.
Demand for physical gold, or gold for immediate delivery, continued to surge in London adding 0.3 percent to $1,368.01, after jumping 4.1 percent on Wednesday. Bloomberg that was it the biggest one-day jump for gold for immediate delivery since June 1, 2012, during the height of the gold bull market.
“After suffering a vicious decline this year gold prices are suddenly soaring, following the Federal Open Market Committee saying Wednesday it will continue its push to buy $85 billion of debt securities a month,” wrote Krantz.
Sixteen analysts surveyed by Bloomberg expect gold prices to rise next week, five were bearish and five neutral.
“The Fed has realized that any attempt to reduce or eliminate quantitative easing will lead to a surge in interest rates,” said Jeff Sica, who helps oversee more than $1 billion as the president of Sica Wealth Management in Morristown, New Jersey. “There will be ongoing currency devaluation both in the U.S. and around the world. I anticipate significant fundamental strength in the price of gold in the near term.”
“The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major currencies, dropped 2.8 percent in the past two weeks to the lowest since Feb. 19,” wrote Bloomberg’s Nicholas Larkin.“Gold moved in opposite directions to the dollar in 11 of the previous 12 quarters. Global equities reached the highest in five years yesterday.”