Gold hovers near 7-month high
Singapore, September 17, 2012
Gold firmed on Monday, holding near an almost seven-month high, as the US Federal Reserve's latest stimulus move to spur the economy led to a rush for bullion -- a traditional hedge against inflation.
Gold, which has risen for the last four weeks, could breach this year's peak around $1,790 an ounce as the United States prints more money to buy assets, driving up the outlook for inflation and weighing on the dollar.
Gold added $5.33 an ounce to $1,774.79 after rising as high as $1,777.51 on Friday, its highest since late February when it hit this year's peak.
"Gold is still pretty bullish this week. I think gold prices will remain firm and probably test the high set in February," Lynette Tan, an analyst at Phillip Futures in Singapore.
"Buyers are still buying gold, but it seems that profit taking may occur later."
Reuters poll showed the Fed will buy a total of $600 billion of bonds under its new stimulus program, known as quantitative easing or QE3, and will look for a US unemployment rate of 7
percent before it halts the programme.
US gold for December rose 0.28 percent to $1,777.60 an ounce as the dollar languished near a seven-month trough versus a basket of major currencies.
The dollar index stood at 78.878, having fallen as far as 78.601 on Friday, a level not seen since late February. It has shed some 6 percent from a 24-month high of 84.100 in July. A softer dollar makes commodities priced in the greenback cheaper for holders of other currencies. - Reuters