Gold Leaps as Dollar Sinks on "Zero Hour" at the Fed; Slips vs. Euro

From Chris Mullen at GoldSeek.com...

Gold Prices held 1% either side of unchanged in Asia and London on
Tuesday, and then dropped as low as $829.60 a little before the New
York opening, but then it then marched back higher and ended near
sessions high of $841.78 with a gain of 0.59%.

The Gold Price then soared in after hours access trade in reaction to
the Federal Reserve’s unprecedented 0% interest-rate decision. By the
Californian close, gold stood more than 2% again, touching a 9-nine
week high of $860 an ounce.

After data showed US Consumer Price Inflation falling the most on
record – down 1.7% month-on-month for Nov., while new housing starts
and building permits also fell to record lows – the Fed announced they
wish to set a target range of 0.00% to 0.25% for the Fed funds rate,
down from their previous rate of 1.0%.

The accompanying announcement also stated that the Fed stands ready to
make large purchases of longer term Treasury securities, agency debt,
and mortgage-backed securities.

Also cutting the discount rate to 0.25%, and noting that financial
markets remained strained, with weak economic conditions likely to
continue, they also intend to keep rates low "for some time".

The action was taken with a unanimous vote.

The US Dollar index plummeted and Treasury prices soared along with the Dow, Nasdaq, and S&P.

The Dollar fell the most ever versus the Euro for a two-day period. The
Gold Price in Euros meantime slipped back to €606 an ounce.

Silver stood more than 5% higher by the end of US dealing, touching
$11.25 an ounce. Platinum gained $18 to $846, but copper had earlier
ended the day a few cents lower at $1.36.

Oil rose to over $46 in early trade on more speculation over a large
cut in output from the Opec oil cartel, but more dismal demand reports
brought prices back down to see a slight loss by the end of the day.

Gold and silver equities rose over 2% in the first hour of trade before
they fell back to see slight losses by late morning. They then soared
higher after the Fed's decision and ended with about 8% gains.