Gold Investment 'to get upper hand' after Fed announcement

JP Morgan has suggested today (March 19th) that Gold Investment looks set to rise after the Fed announced plans to spend $300 billion on long-term treasuries, Reuters reports.

The central bank revealed that it intends to double the amount of money it has already pledged to stem economic deterioration by purchasing huge numbers of US bonds and mortgage-backed securities.

However, this has only served to heighten inflation fears and could weigh heavily on the dollar - which moves in the opposite direction to Gold Prices - according to the financial services firm.

"It is very clear that investors are jumping back into gold and this flow, which has until recently been overwhelmed by dishoarding, may now get the upper hand," it was quoted by the news provider as stating.

That view was echoed by George Gero, a precious metals trader at RBC Capital Markets, who described his "shock and awe" at the Fed's decision in an interview with Market Watch.

"[This] could change [the] inflation outlook and result in a greater trading range," he told the news provider.

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