Chart of the Day: 24-hour spot gold

Due to the continued high rate of unemployment, the Federal Reserve today took an aggressive policy stance that is being dubbed QE3. The Fed will purchase $40 billion mortgage bonds per month and extend the maturity of its holdings of Treasuries. Most importantly, the Fed has stated that it will continue to buy mortgage-backed securities indefinitely until labor markets improve.

The result has been a big rally in risk, mortgage and yield assets as the policy stance was more aggressive than anticipated. The asset class to benefit the most was gold, where the reaction was immediate and very large.

Source: Kitco


Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.