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Yellen Brings Relief to Precious Metals

November 14, 2013 at 2:00 by Vladimir Vyun

Precious metals surged today after Janet Yellen, who is nominated to be the next chairman of the Federal Reserve, said that it is too early to consider stimulus reduction as the economy and labor market are performing “far short of their potential”. Yellen said:

A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases. I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.

Such comments suggest that the Fed will not scale down its monetary futures in the near future and this outlook helped precious metals. Gold bulls should not be too excited as the current bounce does not mean that the metal has left its downtrend. Yet potential for prolonged monetary accommodation may help gold (and other metals) in longer term.

December futures for delivery of gold soared by $12.5 (0.99 percent) to $1,280.9 per troy ounce as of 1:56 GMT on COMEX today. Silver jumped as much as $0.24 (1.19 percent) to $20.69 per ounce. Spot price for platinum was up $5.58 (0.39 percent) to $1,442.43 per ounce and for palladium rose by $4.31 (0.59 percent) to $737.16 per ounce.

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