Gold prices jump after Fed decision

The price of December gold soared in New York in after hours trade following the announcement that the US Federal Reserve would cut interest rates by half a percent to 4.75 percent, surprising many analysts who believed that the cut would come but would only amount to a quarter of a percentage point.

At 2:37 p.m. New York time, December gold was $8.50 higher to $732.30 per troy ounce, while it had been as high as $733.40 per ounce just before 2 p.m. there.

Analysts had said before the announcement that a rate cut of that size would weaken the dollar and help gold prices.

Just before the close of floor trade, and before the Fed decision was announced, December silver was trading 3 cents higher to $12.93 per troy ounce but in after hours trade after the announcement it was up 6 cents more to $12.99 per troy ounce.

Earlier, in London trade, platinum for immediate delivery was up $4 to $1,304.50 per troy ounce on concerns that union problems in South Africa could lead to disruptions in supply.

Later on, about half an hour before the close of floor trade in New York, October platinum was $4.10 higher to $1,305 per troy ounce.