Gold and Silver Near Multi-Month Highs on More Easing from Japan

Wall St. Cheat Sheet

On Wednesday, gold (NYSEARCA:GLD) futures for December delivery edged 50 cents higher to settle at $1,771.70 per ounce, while silver (NYSEARCA:SLV) ticked down 13 cents to close at $34.59.

Both precious metals remain near multi-month highs, as the Bank of Japan announced another expansion of its monetary easing program. The central bank’s policy board decided to increase its asset purchase program $10 trillion yen ($127 billion) to a total of $80 trillion yen. It is also removing the floor on yields that determine which bonds are eligible for purchase.

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The move comes a week after the Federal Reserve launched its third quantitative easing program, buying $40 billion worth of agency mortgage backed securities per month, for an unlimited amount of time. The European Central Bank also recently announced its own bond buying plan called Outright Monetary Transactions. Jeff Kilburg, founder and chief executive officer of Killir Kapital Management, explains, “It’s the race to debase. Everyone in the world is trying to bring their currency down.”

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) traded flat, while the iShares Silver Trust (NYSEARCA:SLV) edged 0.50 percent lower. However, gold miners (NYSEARCA:GDX) continue to rally. Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both jumped more than 1 percent. Silver names such as Endeavour Silver (NYSE:EXK) and Silver Wheaton (NYSE:SLW) gained 4.4 percent and 0.73 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS