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Commodities are surging and investors look for gold to continue recent upward trends. Last weeks announcement from the Federal Reserve played a big part in the end of week market trending and the potential for further devaluation of the dollar. The Federal Reserve plans to buy $600 billion worth of government bonds in an effort to decrease interest rates, make loans cheaper and ultimately stimulate spending across the American economic landscape. As a result, Friday was a huge day for stock action and the index values closed the day out at 2-year highs. The expectation is that, due to the Federal Reserve's move to initiate further quantitative easing, interest rates will remain low for the long term and spending will increase. Federal Reserve Chairman is having to defend this plan however. Critics of the plan feel that the large amount of the greenback that is being injected into the economy could prompt inflation or bubble pricing of bonds and commodities. Apprehension are currently at a minimum though relative to this thought. Investors look towards the safe haven yellow metal asset as the Federal Reserve's move to support the economy through a process of quantitative easing is pushing commodity value trends into the upper tiers of the stock market. Towards the end of last week’s close, gold prices came off of a fresh record and the expectation is that excess liquidity will depreciate the dollar further which is normally an inverse relative to gold and commodity values. The gold, silver, copper and metal futures are shining bright currently, but a hint of apprehension is in the air for the bubble. Author: Camillo Zucari
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