Gold Gains After Bernanke Passes On QE3; Silver Miners Rise

After Bernanke's speech gold has continued its rise after being down for the past few days. In the speech Bernanke did not commit to any new policies to help out the poor economic situation that has been occurring in the United States.

By Murray Coleman
August 26, 2011, 11:22 AM ET
Barrons

Gold is moving up following Ben Bernanke’s highly anticipated speech before central bankers and economists. In it, the Federal Reserve chairman held off on committing to any monetary policies to immediately help a sagging economy. (See excerpts from his speech here.)

The December gold contract on the Comex is trading higher by $18.30 to $1,781.50 an ounce. That’s a slight improvement from before Bernanke’s remarks as the yellow metal initially reacted with a sharp move higher before settling off its morning highs. Meanwhile, the SPDR Gold Shares (GLD) is up 0.5%.

Silver, which is more sensitive to the industrial economic climate, remains down. September silver futures are sliding by four cents to $40.71 an ounce. The iShares Silver Trust (SLV) is off by 0.8%, a modest improvement from 1%-plus losses earlier.

Miners in the more volatile and risky parts of the precious metals markets — namely, small-cap gold stocks and silver — are doing the best so far.

The large-cap focused Market Vectors Gold Miners ETF (GDX) is down 0.9%. But its small-cap oriented cousin,the Market Vectors Junior Gold Miners (GDXJ), is showing renewed strength. After spending much of the early morning down, it’s now up 0.9%. Also, the Global X Silver Miners ETF (SIL) is moving ahead by 0.5%.

The PowerShares U.S. Dollar Index (UUP) is slightly lower on Friday.

But MF Global metals strategist Edward Meir warned in a note to clients earlier that markets are likely to be choppy as investors come to the same conclusions as most analysts — namely, that Bernanke needs more time to review economic data before deciding if monetary policy should be used as a stimulus again.

He pointed out that modestly improved economic signs have started to appear and that “things could strengthen later in the afternoon after an initial wobble, with U.S. equity markets likely taking the lead.”

The SPDR S&P 500 (SPY) has started to rise, most recently up 0.9%.

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