Gold Jumps Ahead of FOMC Projections, Ben’s Presser

After the Federal Open Market surprised the markets by extending its near-zero-interest-rate policy to late 2014 from the previously planned mid-2013, markets now await the 2 PM EST release of the panel’s projections for the economy and, for the first time, members’ expectations for the federal-funds rate target and the date of the first increase. That will be followed by a press conference with Fed Chairman Ben Bernanke 15 minutes later, which should shed some light on why the central bank plans to keep rates so low for so long. Remember, the zero-rate policy was inaugurated in December 2008 in the wake of credit crisis.

The biggest beneficiaries of the Fed’s extension of its ultra-accommodative policies are gold and silver as well as mining stocks. Using exchange-traded funds as proxies, the iShares Silver Trust (SLV) is up 3.7% with more than the full-day average volume already changing hands by early afternoon. The SPDR Gold Trust (GLD) is up over 2% on similar heavy turnover. Meanwhile, the Market Vectors ETF Trust Market Vectors Gold Miners ETF (GDX) is up 4% while the Market Vectors Junior Gold Miners ETF (GDXJ) is surging 5.7%.