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The European Central Bank’s announcement yesterday of a bigger than expected QE program was a welcome surprise for equity and bond traders as both saw broad-based buying globally. As would be expected, the USD rallied sharply with the Euro / USD falling over 3 cents as it trades below 1.12. While gold is showing signs of struggling with its continuing pivots around $1,300.00, it has rallied sharply in Euro terms as well as other currencies.
With regard to the QE program, it calls for purchases of investment grade bonds and asset backed securities totaling 60 billion Euros per month through September 2016. In overnight news, King Abdullah of Saudi Arabia passed away and the situation in Yemen grows worse as rebels have forced the president to resign. While an overnight rally in crude oil did not hold, uncertainty in the region has always been supportive for precious metals. Silver continues to hold above $18.00 as physical demand has been brisk all week, but speculative buying appears to weaken as we approach $18.50. This morning finds volume unusually light for a Friday as traders and investors may be moving to the sidelines as we await news out of Greece on Sunday.
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