Fed Chatter Sends Gold Prices $20 Higher, Silver Outperforms Everything

On Thursday, gold (NYSEARCA:GLD) futures for June delivery jumped $20.30 to settle at $1,680.60 per ounce, while silver (NYSEARCA:SLV) futures surged $1 to close at $32.52.

Both precious metals climbed higher as more Federal Reserve chatter excited markets. Bill Dudley, the president of the New York Fed, signaled that he is most likely in favor of providing additional easing as he gave a negative read on the economy. He said in a speech, “Regardless of the importance of the mild winter in distorting the recent economic data, real economic activity has yet to be strong enough on a sustained basis to make a big dent in the overall amount of slack in the U.S. economy. While growth was stronger in the fourth quarter, most of it was due to inventory accumulation.”

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As the chart from FINVIZ.com below shows, silver was the top performer in the markets on Thursday, gaining 3.2 percent. Meanwhile, the U.S. Dollar (NYSE:UUP) was the worst performer, declining 0.6 percent. Gold increased more than 1 percent as Reuters reports that South Africa’s gold output declined by 11.5 percent in volume terms in February.

Dudley’s comments came a day after Janet Yellen, the Fed’s vice chair, defended the current ultra-easy monetary policy at the Fed. The number two official of the U.S. central bank left the door open to more easing as she said, “I consider a highly accommodative policy stance to be appropriate in present circumstances. But considerable uncertainty surrounds the outlook and I remain prepared to adjust my policy views in response to incoming information,” in a prepared statement.

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) increased 1.2 percent, while the iShares Silver Trust (NYSEARCA:SLV) gained 2.8 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both increased more than 2 percent and Newmont Mining (NYSE:NEM) jumped 3.09 percent. Silver investments such as Hecla Mining (NYSE:HL) and Silver Wheaton (NYSE:SLW) surged 5.2 percent and 4.88 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS