Gold and Silver Decline, No QE3 for Now
Both precious metals declined for the second consecutive trading session ahead of the Federal Reserve’s Federal Open Market Committee statement. After the Fed statement, gold and silver remained in the red as no new policy actions were taken by the central bank.
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Fed officials stated that economic activity “decelerated somewhat over the first half of this year,” and were disappointed in the lingering high unemployment rate. However, it did not launch another quantitative easing program and reiterated its record low interest rate policy. “The Committee decided today to keep the target range for the federal funds rate at 0 to 0.25 percent and currently anticipates that 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,” according to the statement.
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) declined 0.93 percent, while the iShares Silver Trust (NYSEARCA:SLV) dropped 1.77 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Barrick Gold (NYSE:ABX) both traded relatively flat. Silver names such as Hecla Mining (NYSE:HL) and First Majestic (NYSE:AG) edged higher, while Silver Wheaton (NYSE:SLW) was unchanged.
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Disclosure: Long EXK, AG, HL, PHYS