[Following are excerpts from the current issue of the Weekend Update at Iacono Research.]
The Federal Reserve sparked a huge rally in precious metals markets on Wednesday when it forecast super-low interest rates for the next three years and hinted at more money printing to come; the gold price surged more than $50 an ounce within about an hour and silver jumping almost $2 an ounce.
The yellow metal is now off to its best start to a year since 1980 when prices rose nearly 70 percent in three weeks to the inflation adjusted record high of $850 an ounce.
For the week, the gold price rose 4.2 percent, from $1,667.00 an ounce to $1,737.30, as spot silver followed up weekly gains of 3.2 percent, 3.5 percent, and 8.2 percent so far this year with an impressive surge of 5.6 percent last week, from $32.20 an ounce to $33.99.
The gold price has now risen 10.9 percent for the year, down just 9.7 percent from its 2011 high, while the silver price is up 22.0 percent in 2012, but remains 31.3 percent below its high last spring. It’s been a remarkable start for 2012 after a disappointing December and this Reuters graphic on central bank gold purchases last year adds to the case for strong metal demand that is not going to go away anytime soon.
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