Gold has surged to an all-time high of $1,299.80 per troy ounce and gained 1.3% on the week. The recent US Federal Open Market Committee meeting served as a catalyst for higher gold prices as the precious metal came under heavy demand from traders seeking protection from a deteriorating US dollar.
The Federal Reserve’s acknowledgment that inflation is ‘somewhat below’ levels deemed consistent with their mandate was taken as a hint that further Quantitative Easing (QE) was on the cards.
If you were day trading you probably would have seen that these comments made the US dollar plunge. As confidence in paper based currency begins to fade, demand for gold will increase as investors seek an asset that will retain its value during uncertain times.
For those investors who are gold spread betting note that this demand is mostly likely to come from:
1)US investors fearing a drop in the dollar
2)Japanese investors worried about further currency intervention from the Bank of Japan
3)UK investors who are seeing sterling decline amidst buoyant inflationary conditions
Gold could also see support from other areas, according to David Choe of
