Closing Gold & Silver Market Report – 10/29/2014

Brandi Brundidge

10/29/2014 4:28:00 PM

FEDERAL RESERVE ENDS QE, PRESSURES COMMODITIES

The market reacted to the Federal Reserve announcing the end of its quantitative easing (QE) program, which consisted of monthly bond buying to stimulate the U.S. economy. Stocks fell, bonds sold off and Precious Metals were pressured lower after the news broke from the Fed’s policy meeting. Investors also noticed a more aggressive tone toward raising interest rates sooner than later. “Maybe we brought forward the (first rate) hike a month or two from where it was yesterday,” David Ader, chief Treasury strategist at CRT Capital, said. Wall Street expected a fourth quarter rate hike, despite Fed forecasts of a hike occurring near mid-year.

Gold fell slightly more than one percent today when the Fed provided its optimistic outlook for the U.S. economy. Bullion soared 70 percent from December 2008 to June 2011, when the Fed began its stimulus program, but has dropped recently due to factors including a stronger U.S. dollar, improved job market and a boost in consumer confidence. The Fed’s message is the economy is performing at a healthier rate and is only improving, therefore Gold’s safe haven appeal has diminished for the moment. However, tomorrow is a new day.

At 5:15 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,213.80 Down $17.60
• Silver, $17.15 Down $0.15
• Platinum, $1,263.50 Down $4.80
• Palladium, $794.50 Up $0.20

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