Gold and Silver Climb Higher on QE4

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On Wednesday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, increased $8.30 to settle at $1,717.90 per ounce, while silver (NYSEARCA:SLV) futures for March jumped 77 cents to close at $33.78.

Both precious metals climbed higher as the Federal Reserve launched yet another quantitative easing program. In the latest FOMC statement, the central bank announced it will purchase $45 billion of long-term Treasury securities, in order to replace Operation Twist that expires at the end of the year. Furthermore, it decided to keep interest rates at historic lows until at least as long as the unemployment rate remains above 6.5 percent.

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“The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions,” the Federal Reserve’s policy-setting panel said in a statement.

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) gained 0.20 percent, while the iShares Silver Trust (NYSEARCA:SLV) popped 2.05 percent. Gold miners (NYSEARCA:GDX) such as Goldcorp (NYSE:GG) and Barrick Gold (NYSE:ABX) both jumped more than 3.0 percent. Meanwhile, silver names such as First Majestic Silver (NYSE:AG) and Silver Wheaton (NYSE:SLW) surged 5.05 percent and 3.80 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS

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