Gold Rallies on Stimulus Bets
Gold rallied today, touching the highest level in four months, on hopes that central banks across the world would ease their monetary policies. The Federal Reserve released the minutes of its last policy meeting yesterday. The minutes showed that the US central bank still considers additional stimulus:
Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery.
China’s central bank suggested that it may adjust its interest rates and bank reserve ratios in a response to the economic slowdown.
Commodities rallied on the comments of the central banks as stimulating measures should bolster economic growth, increasing demand for raw materials. The Standard & Poor’s GSCI Spot Index climbed to the highest level since May 2. Additionally, easing should spur inflation, fueling the attractiveness of gold as an inflation hedge.
Gold jumped from $1,663.17 to $1,669.03 per ounce as of 23:32 GMT on COMEX today, reaching $1,674.82 intraday — the highest price since April 13.
If you have any questions and comments on the commodities today, use the form below to reply.