Precious metals in the wake of ECB’s stimulus plan and Danish rate cuts

Gold prices rose to reclaim a key $1,300 price mark after the European Central Bank announced its intentions to go forward with a full-blown stimulus plan. Gold for February delivery Increased $7, or 0.5%, to finally settle at $1,300.70 an ounce while March silver futures Increased 17 cents to $18.36 an ounce in electronic trading.  The European Central Bank announced an open-ended bond-buying program worth €60 billion a month as part of its quantitative easing program. Although the introduction of a bond-purchasing program was widely anticipated, analysts and investors said the size was toward the upper end of most expectations. Gold’s sharp increase may also have been affected by the recent move of the Danish central bank to cut its key interest rate for a second time this week in an effort to counter the impact of the European Central Bank’s quantitative easing on its currency. Historically, a more accommodative monetary policy can often lead to inflationary pressure and as inflationary pressure is increasingly felt by investors, investors tend to favor precious metals as a hedge against inflation. Investors recently seem to have anticipated weaker currencies on the back of the European Central Bank’s bigger-than-expected bond-buying program.

As current world economic events continue to trigger a rise in precious metal prices from recent market lows, now may be the right time to consider investing in precious metals. If you have any questions about the precious metals market, buying or selling, Gold and Silver of Louisiana would be happy to answer your questions and provide you with information necessary to make an informed decision that is right for you own personal investment strategy. Customers in the Greater Baton Rouge area continue to utilize the resources of Gold and Silver of Louisiana to facilitate their precious metal needs.