Chart of the Day: 24-hour spot gold

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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.

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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

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