Gold and Silver Rising.

Gold Jumps Most Since March 2009; Silver Climbs to 30-Year High

By Pham-Duy Nguyen

Nov. 4 (Bloomberg) — Gold prices surged by the most since March 2009 and silver rose to a 30-year high after the Federal Reserve said it will buy more debt, undercutting the dollar and boosting demand for precious metals. Palladium jumped.

The dollar slumped to a nine-month low versus the euro after the Fed yesterday said it will buy an additional $600 billion of Treasuries through June to spur growth. The U.S. currency also weakened after the European Central Bank kept its benchmark rate at 1 percent. Before today, gold futures gained 22 percent this year, touching a record $1,388.10 an ounce on Oct. 14.

“The Fed aims to weaken the dollar and create inflation,” said Peter Schiff, the president of Euro Pacific Capital in Westport, Connecticut. “Gold and non-dollar investments should benefit from their efforts.”

Gold futures for December delivery rose $39.60, or 3 percent, to $1,377.20 an ounce at 10:23 a.m. on the Comex in New York. A close at that price would mark the biggest gain for a most-active contract since March 19, 2009.

The Fed has kept its main lending rate at between zero and 0.25 percent since December 2008 and previously purchased $1.7 trillion in mortgage-backed securities and Treasuries.

‘Inflationary Threat’

“Investors are starting to think about the long-term inflationary threat,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. “The $600 billion in bond purchases looks very friendly for buying anything tangible like gold. Commodities are going to look undervalued.”

Silver futures for December delivery added $1.069, or 4.4 percent, to $25.505 an ounce on the Comex. Earlier, the price touched $25.635, the highest since March 1980.

Palladium futures for December delivery climbed $26.30, or 4.1 percent, to $669 an ounce on the New York Mercantile Exchange. Earlier, the price touched $676.85, the highest level since May 2001.

Platinum futures for January delivery rose $45.80, or 2.7 percent, to $1,743 an ounce.

–With assistance from Nicholas Larkin in London and Scott Lanman in Washington. Editors: Millie Munshi, Daniel Enoch

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at

To contact the editor responsible for this story: Steve Stroth at

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