Gold and stock markets soar on QE2

After US Federal Reserve Chairman Ben Bernanke announced a US$600 billion QE2 yesterday, North American markets are significantly higher today.  The S&P 500 rose 1.93% to 1,221.06, while the Dow jumped 1.96% to 11,434.84.

Gold surged 3% and broke through its October all-time high of US$1,387 today, going as high as US$1,393.  In a post I wrote on Tuesday before the QE2 announcement, I stated "...due to QE2, I expect US equities to rally 10% sometime within the next 3 months.  In addition, I expect gold to continue to rally, surpassing its October record high of US$1,387/ounce...My estimate is for gold to hit US$1,430/ounce by the end of 2010."  It appears that those estimates are looking very good right now.