Gold (GLD) Sees Upside Following Fed Decision
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After trading flat today into the Fed rate decision, Gold is now over 2% higher. The ETF SPDR Gold Shares (NYSE: GLD) is up 2.1%.
In an unprecedented move, the Fed established a target range for the federal funds rate of 0 to 1/4 percent. In a related action, the Board of Governors unanimously approved a 75-basis-point decrease in the discount rate to 1/2 percent. In addition, as previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses.
Some view the Fed's move as negative for the dollar and positive for Gold.
In an unprecedented move, the Fed established a target range for the federal funds rate of 0 to 1/4 percent. In a related action, the Board of Governors unanimously approved a 75-basis-point decrease in the discount rate to 1/2 percent. In addition, as previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses.
Some view the Fed's move as negative for the dollar and positive for Gold.
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