Precious metals rise on Fed’s low-rate pledge

Gold’s inflation-hedge appeal received a boost on Wednesday with the precious metal rising after the U.S. Federal Reserve said it intends to keep interest rates near zero as long as unemployment remains high.

Bullion prices jumped in choppy trade after the Fed unveiled a fresh round of Treasury purchases. It committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September.

In a surprise move, the Fed also adopted numerical thresholds for policy, a step that had not been expected until early next year. It said it will likely keep official rates near zero for as long as unemployment remains above 6.5 percent, inflation is not more than 2.5 percent for the next one to two years, and inflation expectations remain contained.

Read Full Article from National Post

- Posted: 2012-12-12 14:44:55

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