GOLD AT 2 WEEK HIGH AFTER BERNANKE SPEECH
Federal Reserve chairman Ben Bernanke gave his speech yesterday at the University of Michigan resulting in the strengthening of market sentiment for metals after Bernanke said that he intends to continue quantitative easing. Gold prices rose by 0.75%, hitting a two-week high.
When the central bank met in December and indicated it might end its quantitative easing program earlier than expected we saw gold futures drop to a four-month low. The bond-buying program is seen by investors as a great source of liquidity that supports prices of commodities, but weakens the US dollar.
Contributions to these gains can also be resulting from the fact that the Japanese prime minister is seeking more aggressive easing measures. Additionally, demand for gold has received a boost from loose monetary policies employed by central banks in China, the US and Europe.
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