Precious metals are booming!

Gold, Silver, daily, YTD 2012 with Quantitative Easing

The European Central Bank did it, the Bank of England did it, The US Federal Reserve did it and yesterday the Bank of Japan just done it.

As the chart above shows, gold and silver responded accordingly, soaring 13.21% and 24.75% respectively since the global easing began in earnest in late July. The chart above illustrates the sharp rise in the price of metals, with gold ($GOLD, black line) and silver ($SILVER, red line) rising sharply since easing began globally. Clearly each metal is approaching 2012 highs but could they go higher? The overall market is accommodative, however it does seem as though inflation is a concern.

What could drive the market much higher? Waiting for Chinese Quantitative Easing, then all the Central Banks will be at the same party. While all this money being injected into the markets would probably support equities, not everyone is convinced that more money is the answer. Regardless, we’ve got an expression on Wall Street: “don’t fight the Fed”.

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