Gold and silver surge on Fed hopesAugust 23, 2012: 1:30 PM ET
Gold and silver prices gained some luster Thursday, after the minutes from the Federal Reserve's last meeting revealed that the central bank is leaning toward launching a third round of bond purchases, known as quantitative easing or QE3.
In fact, the additional stimulus could come "fairly soon" unless the economic recovery regains substantial and sustainable strength, the minutes said.
Gold futures for December delivery rose more than 2% to $1,674 an ounce Thursday, while silver prices for September delivery jumped almost 4% to $30.64 per ounce.
Gold prices have more than doubled since the Fed launched its first bond buying programs in November 2008, while silver prices have nearly tripled. Each time the Fed floods the market with liquidity in the form of bond purchases, the dollar falls under pressure and gold and silver prices get a boost. The metals also gain ground as investors look to them as a hedge against the inflation the Fed's policies will eventually trigger.
Traders on StockTwits are wondering if the move up in gold and silver makes as much sense this time around, since the Fed has not yet announced any official QE3 plans.
After a bit of enthusiasm in response to the Fed minutes Wednesday afternoon, investors have refocused their attention on the day's economic data. They are likely waiting for more clarity from Fed chief Ben Bernanke, who is scheduled to speak next week at the annual symposium in Jackson Hole, Wyo.
In an interview with CNBC Thursday, St. Louis Federal Reserve President James Bullard said the economic outlook has improved since the Fed's last meeting, and the minutes are "a bit stale." Bullard added that if economic growth can remain steady around 2% for the remainder of the year, the Fed will likely refrain from taking any additional steps to stimulate the economy.