Gold Recaptures $1,600 as Bernanke Defends QE Programs
By Eric McWhinnie | February 27, 2013 7:15 AM EST
On Tuesday, gold (NYSEARCA:GLD) futures for April delivery, the most active contract, jumped $28.90 to settle at $1,615.50 per ounce, while silver (NYSEARCA:SLV) futures for March gained 27 cents to close at $29.26. It was gold’s best one-day performance of the year.
Both precious metals received support as Federal Reserve Chairman Ben Bernanke delivered the Semiannual Monetary Policy Report to Congress. The central bank signaled it will continue its massive bond-buying programs, as the benefits outweigh the risks. Bernanke also agreed with the stimulus actions being taken in Japan in order to fight deflation, and does not see an equity bubble forming in the United States.
He also said the Fed takes the potential risks that its policies promote excessive risk-taking “very seriously.” Bernanke adds, “To this point we do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more-rapid job creation.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) and iShares Silver Trust (NYSEARCA:SLV) both increased more than 1 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Goldcorp (NYSE:GG) jumped 1.6 percent and 2.5 percent, respectively. Silver names such as Endeavour Silver (NYSE:EXK) and Silver Wheaton (NYSE:SLW) edged 0.30 percent and 0.85 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS
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