Gold jumps after Fed says no to tapering

                 Gold futures surged in the early part of Thursday’s Asian session as the Federal Reserve surprised markets by opting not to alter its USD85 billion-per-month bond-buying program known as quantitative easing. 

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery soared 4.28% to USD1,363.60 per troy ounce in Asian trading Thursday. The December contract settled lower by 0.14% at USD1,307.60 per ounce on Wednesday. 

Gold futures were likely to find support at USD1,334.60, the high from Sept. 15 and resistance at USD1,375. 

Many investors felt the Fed would announce plans to trim the amount of bonds it buys each month to spur recovery, a stimulus tool known as quantitative easing that drives down long-term interest rates and weakens the dollar to spur recovery, a recipe for rising gold prices. However, the Fed surprised markets by saying tapering of its easing efforts is tied to economic data and not the calendar. 

That could be taken as a sign that the central bank does not yet feel the U.S. economy, the world’s largest, is far enough along in the recovery cycle to withdraw stimulus measures. 

The Fed also appears to be betting that by keeping easing in place, the U.S. economy will be able to continue adding jobs and with the specter of tapering gone, mortgage rates will fall and stimulate housing demand, an integral part of U.S. GDP. 

In U.S. economic news out Wednesday, the Commerce Department said single-family housing starts jumped 7% last month to an annual rate of 628,000 units, the highest level in six months. New construction for apartments and condominiums fell 11.1%. Permits for single-family homes rose 3% to the highest level since May 2008. 

Elsewhere, Comex silver for December delivery surged 6.46% to USD22.958 per ounce while copper for December delivery rose 0.16% to USD3.322 an ounce. - investing.com