Gold’s four-day rally has paused on Friday, turning back lower but still on track for t he biggest weekly gain in nearly two years. The rally began on Monday and accelerated after Federal Reserve Chairman Ben Bernanke said late on Wednesday that the Fed will continue with stimulus measures until more improvement in the U.S. labor market.
This led investors to change their expectations that the Fed was going to begin scaling back its bond purchase program in September as was previously thought. Gold’s safe-haven appeal has been severely dented since Fed Chairman Ben Bernanke said in June the Fed plans to start cut back spending later this year on its $85 billion monthly bond purchases program.
Gold was bought back this week as a hedge against inflation in the past few days, bringing the precious metal’s price up to a high of $1,298.55, up a whopping $85 from Monday’s low of $1,215.51. Bullion’s gains for the week lay at 4.3 percent.
Today gold slipped down to 1267.69 as the dollar rebounded. Gold and the dollar usually have an inverse price relationship, so if dollar rises, gold falls. This is because gold priced in dollars becomes more expensive to buy for investors buying it in another currency.
Gold’s four-day rally has paused on Friday, turning back lower but still on track for t he biggest weekly gain in nearly two years. The rally began on Monday and accelerated after Federal Reserve Chairman Ben Bernanke said late on Wednesday that the Fed will continue with stimulus measures until more improvement in the U.S. labor market.
This led investors to change their expectations that the Fed was going to begin scaling back its bond purchase program in September as was previously thought. Gold’s safe-haven appeal has been severely dented since Fed Chairman Ben Bernanke said in June the Fed plans to start cut back spending later this year on its $85 billion monthly bond purchases program.
Gold was bought back this week as a hedge against inflation in the past few days, bringing the precious metal’s price up to a high of $1,298.55, up a whopping $85 from Monday’s low of $1,215.51. Bullion’s gains for the week lay at 4.3 percent.
Today gold slipped down to 1267.69 as the dollar rebounded. Gold and the dollar usually have an inverse price relationship, so if dollar rises, gold falls. This is because gold priced in dollars becomes more expensive to buy for investors buying it in another currency.
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