Both precious metals finished well-off their lows for the day after the market weighed the Federal Reserve’s most recent statement. The central bank announced today that it would extend its holdings of long-term government bonds by $267 billion in an effort to bring down borrowing costs and boost the economy.
Although the Fed did not announce another asset purchasing program, it did keep the option on the table. “The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability,” the Fed said in its statement.
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) dipped .79 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell 1.23 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold Inc. (NYSE:AUY) and Goldcorp Inc. (NYSE:GG) dropped 2.43 percent and 1.12 percent, respectively. Silver names such as Silver Wheaton (NYSE:SLW) and Coeur d’Alene Mines Corp. (NYSE:CDE) declined 1.50 percent and 2.35 percent, respectively.
Investor Insight: Are Gold Bugs Pessimistic or Realistic?
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Disclosure: Long EXK, AG, HL, PHYS