Precious metals futures surged in Tuesday trading, with investors shying away from the dollar as further quantitative easing looks likely.
Central banks around the world are engaged in a race to make their economies more competitive by devaluing their currencies – and gold, silver and platinum stand to benefit the most.
Comex December silver futures outperformed both other metals and equity indexes, rising 76.4 cents to trade at $22.80 per troy ounce.
December 2010 gold futures jumped climbed $24.70 to $1,341.50 per troy ounce.
Platinum futures also rose, with contracts for January 2011 delivery rising $28.40 to $1,700.50 per troy ounce.
"The markets are attempting to fully price in Fed action sooner rather than later," Ira Epstein, of the Linn Group in Chicago, told the Wall Street Journal. Epstein was referring to the potential for further quantitative easing by the Federal Reserve – the buying of government debt and other assets in order to expand the Fed's balance sheet and stimulate economic growth while curtailing saving.
If investors choose to put their money into hard assets, however, quantitative easing could backfire.
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