Fed Pushes Gold Above $1,700

Published on Wednesday, 25 January 2012 19:27 Written by Todd Shriber

New York, January 25^th  (TradersHuddle.com) – Gold futures reclaimed the lofty $1,700 an ounce, trading to another six-week high after the Federal Reserve indicated it plans to keep short-term interest rates near zero through 2014. Comex gold for February delivery gained 2.1% to close at $1,700.10 an ounce. In gold options, the most-actively traded contracts were February $1,700 calls at 2,468 lots, Bloomberg reported.

As was the case with oil, substantial profit-taking in the U.S. dollar fanned the flames of gold’s intraday rally. Not to mention, gold bulls have been feasting off the Fed’s extended policy of low interest rates for several years now.

Gold wasn’t the only precious metal to shine bright today. Silver for March delivery added 3.6% to close at $33.12. Earlier in today’s session, silver futures touched their highest levels since early December traversing the $33.30 an ounce area. The iShares Silver Trust (NYSE: SLV) came to a dead stop at some horizontal resistance, indicating the ETF may be primed for some near-term profit taking. Still, SLV’s 4% jump prompted an 8.4% plunge in the ProShares UltraShort Silver (NYSE: ZSL).

Silver miners actually outperformed today with the Global X Silver Miners ETF (NYSE: SIL) climbing 4.6% on volume that was more than 50% above the daily average. Similar trends were spotted among gold miners. On Tuesday we noted the Market Vectors Gold Miners ETF (NYSE: GDX) was close to being in severe technical danger. The ETF got things going in the right direction today, surging 6.5% on volume that was better than double the daily average while reclaiming its 50-day moving average in the process.

The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) was the best of the trio, surging 7.6% on above average turnover. GDXJ has another $2 of running room before encountering its next resistance area.

The good times for precious metals didn’t end there. The ETFS Physical Platinum Shares (NYSE: PPLT) advanced almost 2.3% on strong volume while the ETFS Physical Palladium Shares (NYSE: PALL) added 1.9%.

Flying under the radar, we have the First Trust ISE Global Platinum Index Fund (Nasdaq: PLTM), an ETF that no one seems to be talking about. PLTM is home to platinum, palladium and rhodium miners and as is the case with gold and silver miners ETFs over the past year, PLTM has been slammed. However, PLTM is off to a banner start in 2012 having gained over 12% year-to-date.

The Fed’s comments also boosted copper futures resulting in a 1% gain for the iPath DJ-UBS Copper TR Sub-Index ETN (NYSE: JJC). More impressive was the nearly 5% surge spotted in shares of Freeport McMoRan (NYSE: FCX), the largest U.S. copper miner. The stock cleared some horizontal resistance today and looks like it has a clear runway back to the mid-50s.