Gold Prices Rise Sharply; Silver Prices also Rally
Gold prices gained on Wednesday after a report showed that U.S. economy unexpectedly contracted in the fourth quarter of 2012. Silver prices also rose sharply on Wednesday.
Gold investors were focused on the Federal Reserve’s monetary policy statement, which was released after the close of trading on Comex. Earlier this month, minutes of the Fed’s last FOMC had shown that some members wanted the central bank to end its bond buying program before the end of this year. However, the Fed said in its statement that it will continue with its bond buying program.
Ahead of the Fed statement, gold prices had risen sharply after data released by the Commerce Department showed that the U.S. economy contracted in the fourth quarter of 2012. The weaker than expected fourth-quarter GDP data provides support to Fed’s stance of continuing with its bond buying program.
Gold futures for delivery in February on the Comex division of the New York Mercantile Exchange rose $19.10 to settle at $1,679.90 an ounce. The April contract on the Comex rose $18.90 to settle at $1,681.60 an ounce.
Silver prices also rallied on Wednesday, with silver for March delivery gaining 3.2% to $32.18 an ounce. Silver futures had climbed 1.3% on Tuesday.
In late trading on Wednesday, the iShares Silver Trust (ETF) (NYSE: SLV) was up 2.24% to $31, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 4.37% to $48.68, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was down 4.28% to $44.10.
Platinum and palladium also gained on Wednesday, with platinum for April delivery settling 0.6% higher at $1,689.30 an ounce, and palladium for March delivery settling 0.2% higher at $751.40 an ounce.