Metals Surge As Fed Opens New Spigot

Clint Siegner Clint Siegner

Clint Siegner

January 31st, 2012 Comments

Precious metals surged dramatically last week, responding to an announcement from the Federal Reserve. The Fed indicated that it will maintain interest rates at essentially zero through at least 2014 and print more money through its new policy of "inflation targeting.

Gold gained $72.00 (4.3%) with a Friday close at $1,740/oz, and silver gained $1.76 (5.5%) to close at $33.99/oz.

Platinum continued its recent gains, adding another $86 (5.3%) to close at $1,627/oz. Platinum prices have soared $220 (15.7%) since Jan. 9th. Palladium had another "up" week, gaining $11/oz (1.6%), but lagged relative to the gains of the other metals.

From a chart perspective, even though the precious metals complex has pulled back somewhat this morning, gold and silver have held above important barriers at $1,700 and $32.50 respectively. The next area of price resistance for gold appears to be at the $1,750 level. Silver could find a little resistance around the $34 level, but it appears the next significant challenge will be topping $35.50.

Ben Bernanke Gooses the Market Yet Again

The Federal Open Market Committee held its first meeting of the year last week. In Ben Bernanke's post-meeting remarks on Wednesday, he promised to maintain the current Zero Interest Rate Policy (ZIRP) through the end of 2014 – extending a year beyond previous commitments

. Bernanke also re-asserted that the Fed stands ready to purchase more bonds. No surprise – the Fed has already proven itself to be more than willing to create any amount of digital money needed to buy U.S. Treasuries and pursue the failed policies of stimulus and currency devaluation.

All of these recent developments are bullish for the precious metals.

Announcing Availability of $50 Bagsof Pre-1965 Coins

Premiums fell slightly on some retail bullion items last week, including pre-1965 silver coins, silver Maple Leafs, and some fractional gold coins such as the 1/4 oz gold Eagle.

A reminder: 2012 silver American Eagles have arrived in inventory! We still have the 2011 variety coming in as well, so please make sure and let us know if it is important to you to have the 2012s when you order.

Additionally, Money Metals Exchange is now pleased to announce a new reduced minimum bag size on the pre-1965 silver coins. The new $50 face value bag (containing 35.75 oz of silver) can now be bought for less than $1,300. Check out our junk silver product page for up to the minute pricing.

Clint Siegner

About the Author:

Clint Siegner is a Director at Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.