"If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability," the Federal Open Markets Committee said Thursday.
Gold prices surged Thursday as the value of dollars started to sink, because a flood a new cash expected to enter the economy from the monetary system would theoretically make the U.S. currency cheaper, thus making the value of gold -- a commodity that can't increase its supply at will -- more appealing to investors.
Another argument is that the Fed's easing policies for the past four years could lead, in the longer term, to inflation pressures. The fear of rising inflation also bolsters gold prices to the upside.
Though the Fed dominated gold investors' minds for most of the past two weeks, eurozone troubles and the region's developing bond-buying program have also supported a rise in gold prices. Recent easing from Brazil and a massive infrastructure stimulus plan announced by China are two more examples of worldwide actions that are driving gold to its highest levels in a year.Gold mining stocks were mostly higher Friday. Shares of Randgold Resources (GOLD) were jumping 6.1%, while NovaGold Resources (NG) was gaining 4.6%. Among other mining stocks, Kinross Gold (KGC) was up 3.8%, while Barrick Gold (ABX) was gaining 2.4%. Gold ETF SPDR Gold Trust (GLD) was up 0.46% on volume of 3 million. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux
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