Gold Jumps Most in Eight Weeks as Fed Maintains Stimulus via Bloomberg

Gold jumped the most in eight weeks after the Federal Reserve unexpectedly refrained from reducing the pace of monthly bond purchases, increasing demand for the metal as a store of value.

“The Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. Earlier, spot gold touched the lowest in almost six weeks, dropping beneath $1,300 an ounce, on speculation that the central bank would start to rein in quantitative easing.,

“This is a game changer, and some of the money that ran away because of tapering fears will be back,” Michael Gayed, the chief investment strategist who helps oversee $270 million at New York-based Pension Partners LLC, said in a telephone interview. “We are seeing the bullish sentiment return.”

Gold for immediate delivery rose 2.3 percent to $1,341.03 at 2:34 p.m. New York time, heading for the biggest gain since July 22. Earlier, the price fell as much as 1.4 percent to $1,292.02, the lowest since Aug. 8.

Through yesterday, the price dropped 22 percent this year amid low U.S. inflation and an equity rally. The metal rose 70 percent from the end of December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system by purchasing debt.

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