Gold prices on Monday extended last week's rise to a five-month high as investors increased their bets that the Federal Reserve would launch another round of monetary easing. Gold futures for December delivery (CNS:GCZ2) rose $9.60, or 0.6%, to $1,697.20 an ounce in electronic trade on the New York Mercantile Exchange. Floor trading was closed for the Labor Day holiday. Speaking to an annual symposium in Jackson Hole, Wyo., Fed Chairman Ben Bernanke on Friday reiterated the central bank stood ready to bolster the recovery with added policy accommodation. Gold rallied through two rounds of Fed monetary easing from late 2008 through June of last year.
The Fed Jackson Hole speech “ended up to be a confirmation of ‘staying the course’ to stimulus, which the market (for those who were trading) accepted,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, wrote in emailed research.
Increased cash printing by the Fed is seen as heightening the risk of inflation and drawing investors to gold, with the metal viewed as a hedge in the face of rising prices. ... Continue to read.
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