Gold Prices Soar on Fed News, Other Factors

Thursday, January 26, 2012

A combination of several factors, including a declining dollar and the Federal Reserve’s announcement that it would keep interest rates at virtually zero until late 2014, helped to send gold and silver prices soaring to multi-week highs. Analysts expect the upward trend to continue as paper currencies founder and gloomy news continues to dominate the economic headlines.

The spot price for gold was around $1,725 by 2 p.m. Eastern time after jumping more than $60 since the day before, up almost 30 percent from a year ago and more than 7.5 percent over the last 30 days. It smashed through $1,700 on Wednesday for the first in six weeks.

“At the moment everything points to even higher prices, given the strong risk appetite, the better mood among market players, the strong equity markets and the weak dollar,” Commerzbank analyst Daniel Briesemann told Reuters.

Analysts said the single most important factor behind gold’s strong rally was the Federal Reserve. On Wednesday, the privately owned central bank promised to keep short-term interest rates at rock bottom until late 2014, extending the date from its previous pledge to keep rates down until mid-2013.

Also bullish for gold — and bearish for the U.S. dollar, of course — was Fed boss Ben “helicopter” Bernanke’s veiled threat to unleash more so-called “Quantitative Easing,” known in simpler terms as creating new “money” out of thin air and pumping it into the economy by purchasing bonds. The dollar immediately took a hit against other major currencies.

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stewart

keeping interest rates low is not inflationary , it is deflationary. put it this way where are the banks going to lend their money? And if you get a loan what is their spread over prime and what they pay the fed? low interest rates in the long run indicate things will become cheaper not inflated. It just makes sense if you really think about think fire sale. The value of anything goes up the more it is in demand!!!!

http://www.thoughtsandcommentary.com Dale Netherton

Easy money whether from easy credit or printing is inflationary. More money in the market just like a flood of potatoes makes the commodity worth less. How do people think hyperinflation comes about?
R.Cook

One of the reasons that banks are not lending money is that the fed is paying banks interest on their reserves that they do not lend. Just another way the fed is artificially supporting a lousy economy and keeping at risk banks viable.

MontanaMEL

FIRST…”Fractional Reserves” are the basis for all this “expanded M-1 money”…it is all false and fraud upon the US Citizens! This all starts with our FED, the “central bank” “BUYING GOVT BONDS”, which puts the “inital tranche” into play…from 9 to 28 “cycles” later…the amount now in M-1 reflects these “house of cards” built upon the sands of time..

EVERYONE::: GO READ::: The Creature from Jekyll Island – G. Edward Griffin… Then, you too will know just how “fleced” we all are…

BOTTOM LINE::::
Inflation is a TAX ON EVERY CITIZEN…It can only occur if your/our “money” has NO BACKING IN A MEASURED VALUE OF “something” inmutable..i.e., can’t be changed or made from nothing by anything..yes, GOLD does fill this role nicely…as would any other HARD METAL that can be measured without question… Think about it…this would return control of our nation’s money to Congress…BUT…IF WE PAY OFF THE NATL.DEBT, We will have NO MONEY IN CIRCULATION…since that DEBT is the basis for all Fiat money now out there…tough. Guess the Chinese will have some interesting outhouse wall paper, eh?

smart1

gold is going up only because the dollar is falling
John

The US Dollar does not really have any value what so ever, there is clearly nothing behind it. When gold gets to $2,000 per ounce there is a good chance the US Dollar will have the buying power of the Zimbabwe Dollar, basically nothing.
Bob DD

Get rid of the bums at the Fed. What the heck is a private organization doing running our finances? Heck, I can’t get any $$$ on my savings in the bank!

Bruno Boccagalupe

Why in the world do you have your $$$ in a bank??? There are other places for it.

Bob DD

Get rid of the bums at the Fed. What the heck is a private organization doing running our finances? Heck, I can’t get any $$$ on my savings in the bank!
John

There is one thing that Ron Paul has right and that is we need to do away with the Federal Reserve and the bums that run it, else we will be another Zimbabwe.
http://n/a David Reit

Private company or not, who going to run it the guys in Washington that can’t manage the toilet paper in the washroom.
If the Fed is not doing it maybe we need to change the private firm doing the work for US!
Patrick

with printing more money, with nothing to back it, the price of everything will go up.
CaptTurbo

Gold doesn’t go up. It’s simply that worthless fiat currencies alway inflate to their doom.
Chito

The Sunami is coming, and We dont see IT…I am retired and my paycheck is small and almost equal to years ago. When I retired a gallon of gasoline was $1.85 now it is $3.40. This is called inflation. When we have a fixed income in times of inflation, as now, we always lose.
2006 gold was $440.00 per oz. Today it is $1650.00 pe oz.
1650 / 440 = %375 INFLATION [as measured in Gold]
DaveR

No fiat currency has survived over the long run. When USA, the last major country on any gold/silver or other precious metals standard cut itself free from the gold standard during R.M. Nixon’s presidency, the entire world financial and thus economic system became completely vulnerable to manipulation by politicos and central bankers. Milton Friedman warned of this entry into uncharted territory.
tod

Dr.Ron Paul 2012 !!!
http://yahoo Tom Gill

I am a combat veteran,thought fought for this country that I love,but the moderator on this site will not allow my comments(no vulgarities,no lies)Are you listening Mr Moderator?Again?
Stan

Ron Paul has been warning about the financial bubbles and the Fed for a long time now.The more the fed runs ramp-id,the less the value of the dollar,the more dollars it takes to by the same item.deflated dollars equal inflated prices.
http://rebelforiam.com m. sharpe

Gold and Silver in the Bible. Gold and Silver in the U.S.Constitution. They are enemies with fiat currency. Dr. Ben was ask if Gold was currency answered-no. God has allowed America to see the “bad figs” aka money changers with our own eyes. Blind leaders of the blind. The parable of the “wheat and tares”, God tells us Who the tares are;we are to mark them and leave them alone.We have allowed them to control education,religion,politics,and economics in America-it is time to show them the exit.