Gold Sees Immediate Increase and Long Term Potential Gains  

Thursday, January 26, 2012 –in a still-struggling economy, the Federal Reserve announced plans yesterday to maintain low interest rates for another 18 months at minimum. The move caused a subsequent reversal in the trading direction of gold – shifting from modest declines to an increase of $61.70/oz, driving the price of gold back over $1,700 to $1,726.20 currently.

Yesterday’s decision by the Fed to keep interest rates at historic lows is a continuation of a policy that has driven precious metal prices higher for the past four years. As you might remember, target rates declined for most of 2008, while 2009 marked the first full year of 0-.25% target rates. As interest rates are one of the myriad of factors that affect gold prices, the three year period from 1/1/09 – 1/1/12, saw gold increase from $880.80/oz. to $1,566.00/oz. – a 78% total gain.

The Federal Open Market Committee’s decision to maintain near-zero target rates until late 2014 leads many market analysts to strengthen their outlook for precious metals. Due to this continuance of low interest rates at the Fed level, they predict gains in precious metals for the foreseeable future. 

At DGSE Companies, we are advising clients on a one-on-one basis as to what this decision means to their precious metals investing strategy and we encourage investors – both existing and new – to contact us for expert guidance.

DGSE Companies can be reached at 972-484-3662 or toll-free at 800-527-5307.