• 139 days Could Crypto Overtake Traditional Investment?
  • 144 days Americans Still Quitting Jobs At Record Pace
  • 146 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 149 days Is The Dollar Too Strong?
  • 149 days Big Tech Disappoints Investors on Earnings Calls
  • 150 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 152 days China Is Quietly Trying To Distance Itself From Russia
  • 152 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 156 days Crypto Investors Won Big In 2021
  • 156 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 157 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 159 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 160 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 163 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 164 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 164 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 166 days Are NFTs About To Take Over Gaming?
  • 167 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 170 days What’s Causing Inflation In The United States?
  • 171 days Intel Joins Russian Exodus as Chip Shortage Digs In
Is A Massive Gold Rally On The Horizon?

Is A Massive Gold Rally On The Horizon?

Gold prices have fallen from…

Rhodium Climbs Reaches Record Highs

Rhodium Climbs Reaches Record Highs

This week Rhodium hit a…

U.S Targets Russian Gold Stockpiles

U.S Targets Russian Gold Stockpiles

In its latest round of…

Mining.com

Mining.com

Mining.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

Contact Author

  1. Home
  2. Commodities
  3. Precious Metals

Gold Skyrockets After Fed Pledges "Unlimited" Cash To Boost Economy

Gold Skyrockets

The gold price surged on Monday after the US Federal Reserve promised to pump “unlimited” amounts of money into the financial system, boosting the metal’s status as a store of wealth and an inflation hedge.

On the Comex market in New York, gold for delivery in April, the most active contract, closed just off its day high at $1,567.60, up $83.00 an ounce, or 5.6% compared to Friday’s close.

Monday was the biggest one-day dollar gain in the history of gold trading, surpassing the October 25, 2011 advance of more than $70 an ounce that took the price above $1,700. In percentage terms, today’s performance is the best in over a decade.

(Click to enlarge)

On Monday, the Fed committed to unlimited purchases of US Treasuries and agency mortgage-backed securities, flooding financial markets with easy money.

“The Federal Reserve is committed to using its full range of tools to support households, businesses, and the US economy overall in this challenging time,” the Fed said in a statement.

“The Fed unveiled its biggest cannon seen to date – even bigger than in the great financial crisis,” Tai Wong, head of base and precious metals derivatives trading at BMO told Reuters:.

“The market reacted instantly with equities and gold soaring behind the Fed’s new ‘Draghi’ approach. However, the acid test here is whether this optimism will hold for more than one day.”

Matthew McLennan, head of the global value team at First Eagle Investment Management, which manages about $101 billion in assets told Bloomberg:

“When the Fed progressively removes liquidity fears, provides forward guidance on rates, and when it possibly even controls the yield curve, and the economic softening is observable across the whole economy, the potential hedge value of gold can reassert itself powerfully.”

Gold has been on a wild ride over the past weeks, dropping as low as $1,450 an ounce a week ago after briefly hitting a seven-year high above $1,700 a week earlier.

By Mining.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment