Precious Metals Recap: Bernanke Ponders Easing Beyond Infinity?

Wall St. Cheat Sheet

On Monday, gold (NYSEARCA:GLD) futures for December delivery increased 2.30 to settle at $1,726.30 per ounce, while silver (NYSEARCA:SLV) gained 16 cents to close at $32.25.

Both precious metals edged higher as expectations for more quantitative easing from the Federal Reserve heat up. Last month, the central bank unveiled an unlimited QE program, purchasing $40 billion worth of agency mortgage-backed securities per month, for as long as it takes. However, another Fed program called Operation Twist ends this year and is likely to be replaced with even more money printing.

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Greg Robb from MarketWatch writes, “After historic changes last month, Federal Reserve officials this week will discuss a possible expansion of the size of its third round of bond buying and better ways to guide markets about future policy actions.” He adds, “And the central bank will consider whether to expand its bond-buying at the end of the year to take account of Treasury purchases under its Operation Twist plan that finishes at year-end.”

By the end of the day, shares of the SPRD Gold Trust (NYSEARCA:GLD) closed 0.37 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) finished almost 1 percent higher. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Goldcorp (NYSE:GG) both jumped more than 1 percent. Meanwhile, First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) surged 3.3 percent and 2.2 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS