Gold and Silver Surging on FOMC Statement

Wednesday's FOMC statement has sent the price of gold and silver sharply higher after the Federal Reserve said that they will keep their benchmark interest rate near zero until at least late 2014. Previously, the Fed had pledged to keep the fed funds rate exceptionally low through at least the middle of 2013. The even more dovish language is helping boost risk assets on Wednesday mid-day as the major U.S. equity averages are all trading in positive territory. Before the statement, both the Dow and S&P were lower on the session. The FOMC statement said, “The Committee expects to maintain a highly accommodative stance for monetary policy. Economic conditions -- including low rates of resource utilization and a subdued outlook for inflation over the medium run -- are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.” The language is helping to boost precious metals in intra-day trading. COMEX gold futures have jumped 2% to $1,698 and have been heading straight up since the statement. The SPDR Gold Trust ETF

is now up 1.91% to $165.10. Reaction is even more obvious in the smaller silver market. COMEX silver futures were last trading 3.83% higher at $33.21 while the iShares Silver Trust ETF

had risen 4% to $32.33.