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Fed’s QE3 Spurs Rally of Commodities

September 13, 2012 at 22:31 by Vladimir Vyun

Commodities surged today after the Federal Reserve announced the third round of quantitative easing. The Fed said in the statement:

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.

Additionally, the US central bank promised to keep the monetary policy extremely accommodative through at least mid-2015.

The dollar fell after the announcement, boosting dollar-priced commodities. Gold especially profited from the stimulus measures as the easing reignited worries about inflation. Prices soared even as traders expected the move from the Fed.

Gold surged from $1,731.60 to $1,769.10 per ounce, the highest settlement since the huge drop on February 29, as of 22:12 GMT on COMEX today. Silver advanced from $33.13 to $34.62 per ounce. Copper climbed from $3.6935 to $3.7365 per pound today. Oil edged up from $97.08 to $98.05 on NYMEX.

If you have any questions and comments on the commodities today, use the form below to reply.

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