The gold price has staged a dramatic recovery after a surprise decision by the US Federal Reserve not to scale back its monetary stimulus programme until the economy shows further improvement.
The precious metal price had previously fallen from $1,418 per ounce on 14 August to $1,299 per ounce on 18 September as markets anticipated that the Fed would start reducing its $85 billion bond-buying plan, also referred to as 'tapering'.
Gold is now up 5.7% to $1,373 per ounce on the back of the Fed announcement. That's triggered a new rally in gold mining equities, led by Avocet Mining (AVM) which rises 36.2% to 19.75p and Petropavlovsk (POG) which jumps 15.3% to 81.25p.
We have written about Aureus Mining (AUE:AIM) in today's new issue of Shares, saying the market had failed to recognise the importance of getting all the money to build its New Liberty mine in Liberia. Its shares rise 1.8% to 36.38p.
The Fed's actions have spurred markets around the world. Japan's Nikkei 225 index rose 1.5%; Hong Kong's Hang Seng jumped 1.6% and India's BSE Sensex advanced 3%.
In the UK, the FTSE 100 is up 1.2% and the FTSE All-Share advances 1.3%.
The Fed says there is no fixed timetable to start tapering. This comes amid downwardly-revised forecasts for growth this year to between 2% and 2.3%. That's much lower than June's estimate of 2.3% to 2.6%.
Stockbroker Numis doesn't believe the Fed's policy will change until January 2014 which is when chairman Ben Bernanke steps down.