Gold and Silver rise as Yellen Speaks
Gold and silver climbed today as new Federal Reserve Chairwoman Janet Yellen indicated that the end of the Federal Reserve printing money and maintaining low borrowing costs was far from nigh.
$GDX, an exchange traded fund that tracks the performance of gold miners, jumped more than 3% intra day, pushing it into the StockTwits’ trending ticker. SPDR’s gold ETF, $GLD, rose more than a percent. Proshares’ silver ETF, $SLV, gained nearly a percent.
Feb. 11 at 9:40 AM
Precious metals tend to rise on any news seen as dollar-inflationary on the belief that the metals’ limited supply will enable these commodities to hold their value while the dollar’s value erodes.
Feb. 11 at 1:29 PM
Though Yellen said the central bank would continue tapering its bond buying stimulus as the economy improves, she rejected the idea that the Federal Reserve has a set plan to cut $10 Billion-a-month in bond purchases. She also said that a near-zero benchmark interest rate would “likely be appropriate well-past the time that the unemployment rate declines past 6.5%.”
Inflation concerns may be premature at the moment. U.S. inflation in 2013 was around 1.5%. The Federal Reserve hopes to push inflation to 2%, which the FOMC says would strike the right balance between maximum employment and price stability.
Still traders hedged for dollar declines.
Feb. 10 at 10:14 PM
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