Gold Up 1.5%, Silver Surges 3% – Yellen Stays Ultra Loose At 0.25%
By: GoldCore
GoldSeek.com
Thursday, 22 September 2016
Gold was up 1.5% and silver surged 3.1% yesterday after Janet Yellen again failed to raise rates from record lows at 0.25%. The Fed maintained ultra loose monetary policies which are again creating stock and bond market bubbles in the U.S. and other countries.
Global stocks and commodities also rose on continuing relief that the Fed continues ZIRP and remains ultra loose along with the BoJ, BOE and ECB whose policies are even looser. The BoJ also maintained ultra loose monetary policies at negative 0.1 percent rate and said it would continue buying government bonds at the current pace for the time being.
Spot gold prices hit a two-week high of $1,336.8 an ounce after the Fed said that it would keep rates at record lows. Silver rose to as high as $19.86 and both precious metals have consolidated on those gains in Asian and European trading.
Euro gold rose to €1,194/oz and sterling gold to £1,024/oz.
The Federal Reserve signaled once again that zero interest rate policies (ZIRP) will continue. It suggested once again that it might raise rates by 0.25% to 0.5% by the end of this year – but only if the labour market improved.
Yellen found herself forced to defend the Fed against Donald Trump’s claims that political pressure and bias is influencing monetary policy – possibly favouring the Democratic incumbents.
The BoJ dropped its explicit target of increasing base money, the amount of money it prints, by an annual whopping 80 trillion yen ($788 billion). Analysts said was a tacit admission its aggressive asset-buying was becoming unsustainable and was not having the desired effect.
Years of massive money printing have completely failed to jolt the economy out of decades-long stagnation. Indeed, it can now be argued that the massive QE programmes of the Fed, BOE and indeed the ECB have failed to ignite robust and sustainable growth in the major economies.
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