Gold rebounded sharply as the Fed’s decision to purchase long-dated government debt and expand its balance sheet raised inflation fear, increasing gold’s appeal as an inflation hedge. Spot prices closed at USD939.90/941.40, up over USD20 from the previous day. Gold price surged to as high as 954 after the Fed's pledge as the dollar weakened. However, the benchmark futures met selling pressure afterward and settled at 889.1. Currently rebounded to 932.7, investors find buying the precious metal below $900/oz a bargain but any strong rally in the near term will likely be tempered by strength in the stock markets.
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