Gold and Silver RALLY on ECB Bond Plan

On Thursday, gold (NYSEARCA:GLD) futures for December delivery increased $11.60 to settle at $1,705.60 per ounce, while silver (NYSEARCA:SLV) futures jumped 35 cents to close at $32.67.

Both precious metals hit new multi-month highs as Mario Draghi, president of the European Central Bank, announced a new unlimited bond buying program called “Monetary Outright Transactions.”

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The ECB will buy bonds with maturities of up to three years, and the buying will be sterilized. “We need to be in a position to safeguard the monetary policy transmission mechanism in all countries of the euro area,” Mr. Draghi said, repeating that the ECB would stay “firmly within our mandate” of keeping stable prices, according to Bloomberg.  The announcement sent the euro to as high as $1.2650, its highest level in two months. Meanwhile, the U.S. dollar index fell to as low as $81.02.

By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) closed 0.35 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) increased 1.28 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Goldcorp (NYSE:GG) jumped 2.39 percent and 3.13 percent, respectively. Silver names such as Hecla Mining (NYSE:HL) and Silver Wheaton (NYSE:SLW) both gained more than 1 percent.

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Disclosure: Long EXK, AG, HL, PHYS