Gold jumps $59 on the back of Fed holding off on taper

After Wednesday’s announcement Gold surged more than 4% to above $1,360 an ounceĀ  after US Federal Reserve’s unexpected decision to continue buying bonds.

The Economic Times Article:

Gold surged more than 4 per cent to above $1,360 an ounce on Wednesday after the US Federal Reserve’s unexpected decision to continue buying bonds unleashed bullion’s biggest one-day buying spree since June 2012.

The move by the US Central Bank to continue its $85 billion monthly buying pace due to worries about rising borrowing costs surprised financial markets that were broadly braced for a reduction in the central bank’s monetary stimulus. Silver rallied around 6.5 per cent, its biggest one-day gain since November 2008.

Citing strains in the economy from tight fiscal policy and higher mortgage rates, the Fed decided against the tapering of asset purchases that investors had all but priced into asset markets across the board.As long as that happens, gold looks attractive.”

The metal is a traditional hedge against inflation and economic uncertainties, particularly those brought about by central-bank actions.

Gold now rose above its 100-day moving average at $1,350, but is still some $70 below a four-month high at $1,433 set on Aug. 28.

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