federal open market committee

Gold Bounces Back on Iran Fears and Weak Dollar

Following Iran’s announcement that it had inserted a domestically produced nuclear fuel rod into its atomic research reactor, gold and silver prices spiked significantly.

On Tuesday, gold prices reached $1,600 an ounce at the Comex division of the New York Mercantile Exchange, a ten week high. Silver also moved upward to a five month high as a continuing decline of the dollar inspired a commodity rally.

Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, told Bloomberg the “fear trade” is back because of events in Iran. “Also, we are seeing buying across commodities because of the weaker dollar,” he said.

“Iran’s nuclear plans have raised fears that it is getting desperate and will take some drastic step,” Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt., said in Mumbai. “More sanctions are expected from the US and other nations. This will have a positive impact on gold prices as ideally people would try to buy gold.”

The new year rise in precious metal also follows the most recent Federal Reserve announcement. The Fed indicated it will begin to publish policymakers’ projections for its benchmark interest rate on overnight loans.

“Accommodating monetary policies throughout the developed world cause a renewed migration to hard assets by individual investors and sovereign-wealth funds,” Byron Wien of Blackstone explained.

According to minutes from the last Federal Open Market Committee meeting, a significant number of Fed officials agree economic conditions warrant a further “easing” of monetary policy.

Stubborn interest rates at or near zero are bullish for the gold market.

Article written by Kurt Nimmo
Infowars.com
January 4, 2012

Gold Leaps to New High

Gold prices shot to their highest level in history today touching a high of $1,297.40.

As you may well be aware of, the gold prices that you are quoted is heavily dependent on the fluctuations in the demand for this precious commodity and the future seems rosy because there are increasing numbers of people investing their money into buying gold. The reason why you should also consider putting your money into buying gold is that it becomes an asset that is solid, and which has bright chances of appreciating which will make your money grow for you.

Effect Of Weakened Dollar

What’s more, things are even more interesting with the gold prices as the relative weakness of the US dollar has impacted these prices. That means that investors are turning to buying gold in order to offset the weakened dollar’s impact on gold prices which has only pushed these prices northwards.

The U.S. dollar has been hit hard by Tuesday’s Federal Open Market Committee meeting statement from the Federal Reserve. While the Fed did not specifically detail quantitative easing measures, most analysts said the statement strongly suggests such due to the very accommodative stance of the Fed, amid a still-anemic U.S. economy. Fresh quantitative stimulus from the Fed, which basically means increasing the U.S. money supply by buying of U.S. securities by the Fed, is significantly dollar-bearish.

And, given that oil prices too are heading north, the fear that inflation will also show no signs of abating which will have the effect of eroding the value of your money; it means that buying gold is a good safeguard for the future.

As we’ve seen in recent weeks, gold prices have been soaring, and with the ever looming threat of a currency crisis, investors are finding it expedient to put their money into assets such as gold that are solid and good value for the future as well. A reason for such thinking is that gold prices will ride over any turmoil in the US economy which may come about as a result of a war in Iran which could otherwise bring stock and property prices crashing down.

Silver prices also hit another fresh 30-month high of $21.26 an ounce. The sinking U.S. dollar and the record-high gold prices have boosted silver. Prices are still in a steep four-week-old uptrend on the daily bar chart and there are still no early technical clues to suggest a market top is close at hand.

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