Gold Reacts Badly to Fed Decision (GLD, IAU, GDX, GDXJ)

The gold miners are faring a little better. The Market Vectors Gold Miners ETF (AMEX: GDX) is up nearly 0.4% at $47.85 in a 52-week range of $39.08-$66.98. The Market Vectors Junior Gold Miners ETF (AMEX: GDXJ) is up 0.7% at $21.31 in a 52-week range of $17.37-$39.50.

The junior miners, always a speculative play, reacted a most strongly to the Fed’s announcement, but there’s really no good reason for it. The dollar index remains about flat so far today at 81.384 and the price of gold itself closed down -0.5% at $1,614.30/ounce.

One development that may be keeping gold-related issues from taking a bigger nosedive is a report that German chancellor Angela Merkel has said that Germany will support the use of the €500 billion European Financial Stability Fund (EFSF) to purchase sovereign bonds. That statement has propped up the euro and added some weight on gold prices.

Paul Ausick