The Federal Reserve’s November 3 announcement that it will buy $600 billion in Treasuries has boosted commodities prices, including gold and silver.
Gold has reached a record $1398.50 an ounce, and silver hit a 30-year high of $27.01 an ounce.
Commenting on the rise in the commodities prices, portfolio manager Joe Foster said, “It’s being driven by the Fed … The Fed is printing money,” and added, “People are losing faith in the ability of the US government to provide a sound currency. So they’re turning to gold and silver to preserve their wealth.”
Commodities such as gold and silver have been strengthened because the Fed’s $600 billion purchase is expected to weaken the dollar. Wheat, cottom, sugar, and corn have all hit new highs recently, as have oil prices.
Some economists predict that commodities prices will go even higher in the coming months. For example, some analysts believe that gold might go as high as $1600 an ounce.
Consumes may feel the commodities price hikes at the grocery store soon, with higher prices for meats and grain-based products such as bread, crackers, pasta and pizza.
