Gold Prices Surge After QE 3 Announcement

As markets expected, Ben Bernanke announced a third round of quantitative easing today in the form of $40 billion per month in mortgage-backed-securities. But unlike other programs with a definitive ending, this will perpetuate until the Fed sees meaningful growth in the economy and a better employment situation. That kind of open-ended policy has many cringing in their seats, as it seems like printing more money is the only weapon that the Fed has left in its arsenal. But despite how you feel QE 3 will perform, there is no question that gold investors were overjoyed to hear the news [for more gold news and analysis subscribe to our free newsletter].

During Bernanke’s speech and up to its conclusion, gold suffered a swift dip, but that was only temporary. The precious metal went on to surge nearly 2% along with big gains for major equities and other commodities. Now, the precious metal has its sights set on $1,800 per ounce and beyond as money printing will surely prop up gold prices in the near term. But this precious metal was not alone, as silver surged more than 3.5% along with both platinum and palladium making a run higher. Below is a chart of gold’s trading through out today’s session.

Now the only question you have to ask yourself is whether or not you think gold will pullback anytime soon, or if it slated to make another run towards $2,000 per ounce. The commodity certainly may slow down in the next few days as the excitement wears off, but with money printing plans from the U.S. as well as the ECB, it would seem that all of the stars have aligned for gold to make a run at its historical high. What do you all think, how high can gold go? Let us know in the comments below!

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Disclosure: No positions at time of writing.

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  • Hmhare

    How high Gold can go depends on how many Government IOU’s are printed.
    Gold is constant, it is paper that is being devalued.
    Gold is NOT going UP, Paper IOU’s are going down.
    Inflation and double digit interest rates lie ahead, leveraged Real Estate will fall.
    Inflation numbers are cooked, we all know the facts when we gas up or buy Groceries, but Governments misstating Inflation numbers mean they have to pay less on Indexed Social Benefits.

  • Cindy Bruce

    If half of what I think is happening before our very eyes, both here and around the world, gold just may shoot up to $3000 or higher before the end of November.

    But silver should be even more interesting.  Historically, an ounce of silver is generally 1/16th the value of an ounce of gold.  However, for the past few years silver has only had 1/52nds the value of gold.

    That means that as precious metals become front and center in an economy going down the toilet, there is likely to be a very serious correction in the value of silver.

    My bet is on silver.  Besides, I have no doubt they’ll one day confiscate all the gold, just like they did during the great depression, offering owners pennies on the dollar.