Gold ETFs have risen to a six-month high with the precious metal trading around $1,770 an ounce as the Federal Reserve delivered even more than expected on its stimulus pledge.

The race to debase currencies continued last week after the FOMC delivered more than expectations on new easing targets.

Last week’s rally kicked off as the ECB’s new unlimited bond purchasing plan was supported by the German Constitutional court’s rejection of challenges to the European Stability mechanism (ESM).

While conditions were attached to the ESM ruling, markets responded optimistically. This was swiftly followed by the Fed’s announcement that it is launching a third round of open-ended quantitative easing and that the Fed Funds rate will be held close to zero at least out to mid-2015.

Of particular note, the Fed stated that it “expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens,” highlighting that more QE rounds and other
unconventional monetary policies will continue until US employment and the US economy are fully back on a self-sustaining track.

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