After earlier falling below $900 an ounce, the price of gold for April delivery surged $23.00 to $939.80 an ounce mid-afternoon Wednesday after the Fed made the announcement that it will buy long-term Treasurys.
According to MarketWatch, the Fed announced that it was “committed to buying $300 billion in longer-term Treasurys to help the struggling American economy recover.”
“By buying Treasurys, the Fed is essentially creating more money to buy national debt, which weighs on the dollar,” reports MarketWatch. The U.S. dollar tumbled Wednesday afternoon.
Posters on the Stockhouse Bullboards reacted to the sudden spike in the gold price, with oxinos on the Skygold Ventures Bullboard, saying: “What a volatile market! Things are starting to improve here also. We may have an up day by the close[sic]”
MAKEITBACK also noted: “That was a $40.00 vertical spike----somebody with deep pockets bought a honking big load of gold[sic]”
oxinos added: “We may be at the threshold...of a significant rise in the price of gold bullion! The price has touched $940.00! Stocks may follow gold bullion higher. Time will tell![sic]”
On the Eldorado Gold Corp. board, Stockhouse member esselte25 said: “A day to remember. Just incredible[sic]…”
While, on the Horizons BetaPro S&P TSX Global Gold Bull Plus ETF board, SDragon said: “Well, I think the Fed just gave Gold a floor at $900[sic]”
And, CentaurusA offered the following thoughts on the Cypress Development Corp. board: “Well now, could it be that treasury bond auctions are not going very well, and the Fed is forced to buy up the long end of the curve or else interest rates would be forced higher in order to stimulate demand with a more attractive yield? Higher rates are the death knell for a government and it's people up to their eyeballs in debt, hence the need to buy the government debt in order to keep rates low[sic]”…