Janet Yellen, chair of the US Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, DC, on Wednesday.
Photo by: Bloomberg
TORONTO (miningweekly.com) – Precious metals such as gold, platinum and silver gained on Wednesday after the US Federal Reserve’s Federal Open Market Committee unanimously decided to raise the target range for the federal funds rate to between 0.25% and 0.5% - the first such increase in ten years.
Gold gained about a per cent or $11/oz on Wednesday afternoon to change hands at $1 072/oz. At $869/oz, platinum added 1.9% in value over Tuesday closing price of $853/oz, while silver was up by $0.45/oz, or 3.23% at $14.22/oz.
Copper also gained nearly a per cent at $2.07/lb.
“The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labour market conditions and a return to 2% inflation,” the Fed said in a statement.
“The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.”
The rate increase indicated confidence that the US economy had recovered from the damage that the 2007 to 2009 financial crisis had dealt the economy. According to the Committee, there had been considerable improvement in labour market conditions this year, and it was reasonably confident that inflation would rise, over the medium term, to its 2% objective.
The NYSE Composite Index gained about 121.23 pints, or 1.2% to 10 232.17 points. The TSX also reacted positively to the announcement, adding 210 points to 13 130 points, while the TSX-Venture Exchange added 2 points to 497.75 following the meeting.
The TSX's mMEtals & Mining Index rose 4.05% to 310.49 points, while energy fell 0.64% to 157.78 points - below ten-year lows, as US benchmark oil prices fell 4.31% to $35.74/bl.
The Fed stressed that it would gradually tighten the world’s largest economy’s fiscal policy, allowing economic activity to continue to expand at a moderate pace and labour market indicators to continue to strengthen.