"This is going to play out bullishly for the precious metals," said Credit Suisse analyst Tom Kendall, pointing to renewed weakness in the dollar after the statement." from South China Morning Post

"Gold's initial reaction to the news was largely driven by the dollar. The two typically have a close inverse relationship, as gold can be bought as an alternative to the US unit, and becomes cheaper for other currency holders as the dollar slips. While this correlation erodes at times of extreme uncertainty in the financial markets - as seen earlier this year as the euro zone sovereign debt crisis bit - the link has recently strengthened. The US currency fell sharply after the Fed statement, hitting a 28-year low against the flourishing Australian dollar and sliding against the euro, British pound and yen.

The possibility of further adjustments to the level of QE could inject even more volatility into the dollar, with Commerzbank saying the policy could prove a "bottomless pit". "Things are likely to become increasingly uncomfortable for the US dollar, and it only seems a matter of time until euro-US dollar breaches its recent high at 1.4160," it said."