Gold and silver futures bounced back from their intra-day losses Tuesday afternoon amid news that the Federal Reserve is more seriously considering a third round of quantitative easing (QE3) at either next week’s or September’s FOMC meeting.
Gold futures, per the August contract, fell to as low as $1,567.20 per ounce on the COMEX, but climbed back to as high as $1,582.10 in electronic trading. Silver futures followed a similar path, as the September contract slipped to $26.58 in mid-day trading but later jumped to $26.99 per ounce.
The rebound in precious metals coincided with a report by the Wall Street Journal’s Jon Hilsenrath – considered by many to have been hand-picked by the Federal Reserve as its mainstream media outlet – who stated that “Federal Reserve officials, impatient with the economy’s sluggish growth and high unemployment, are moving closer to taking new steps to spur activity and hiring.”
Hilsenrath’s report went on to say that “Since their June policy meeting, officials have made clear—in interviews, speeches and testimony to Congress—that they find the current state of the economy unacceptable. Many officials appear increasingly inclined to move unless they see evidence soon that activity is picking up on its own… Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move.”
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