Gold Hits Highest Price Since May

Published: 22 August, 2012 14:10

Gold and silver bullionOn Wednesday gold hit $1,650 an ounce for the first time since the beginning of May, reaching a high of $1655.50, before settling down to £1640.50 before the end of session.

The gold price was unchanged for most of the session before the minutes from the US Federal Reserve were released, which suggested the central bank was ready for another round of monetary stimulus in the near future.

Many investors are assuming that whatever tools are used to stimulate economic growth, they are likely to be bullish for the gold market.

This is key information in what has recently been a volatile commodity. Gold is up around 6% so far this year, but has been fluctuating widely since May due to a lack of concrete information about a possible stimulus package from the Federal Reserve and other central US banks. At points, possible signs of improvement in the US economy were seen as making a stimulus package less likely.

Although solid information is still not forthcoming, the minutes released on Wednesday were seen as showing a favourable position towards further monetary stimulus. Along with the latest economic data auguring poorly for economic growth, this has solidified the prevailing opinion for the future of the market. Gold is at a high, and many investors believe the next several trading sessions are likely to show further increase.

Similar behaviour has been seen for other precious metals. On Wednesday Platinum rose for the fifth straight day, reaching it’s highest price since early June, in response to spreading unrest among the labour force in South Africa.

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