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Market Nuggets: Credit Agricole CIB Says Fed Action Highlights "Attractions" Of Precious Metals
5 November 2010, 2:49 p.m.
By Allen Sykora
Of Kitco News
http://www.kitco.com/
(Kitco News) -- The Federal Reserve’s statement on quantitative easing mid-week “served to highlight the attractions of precious metals notably as a store of value and an alternative to paper currencies,” says a research note from Credit Agricole CIB. The central bank announced plans Wednesday to purchase $600 billion in Treasury securities over the next several months in a bid to push down long-term interest rates. Against this backdrop, spot gold traded to a fresh record just above $1,397 an ounce Friday as the Fed’s program of asset purchases implies a weaker U.S. dollar and higher inflation expectations, Credit Agricole CIB says. “The more industrial of the precious metals are outperforming gold and we expect this to continue, especially the supply-constrained PGMs (platinum group metals),” the bank says.