The gold price hit an new record today of $1370.77 an ounce and silver has reached a thirty year peak due in large part to the U.S Federal Reserve Signalling a second stimulus was needed. This year alone gold has improved and rallied 25 percent against a weakened dollar. Results from JPMorgan Chase JPM.N, the second-largest U.S. bank by assets, helped the dollar cut some of its losses in early afternoon trade and nudged gold down from session highs, but it quickly bounced back.
Gold’s inverse relation to the U.S. dollar was at its most pronounced in six months on a 30-day rolling basis in early European trade. Extremely loose monetary policy has contributed significantly to a move away from paper currencies to gold and other precious metals.
Chief investment officer at London and Capital, Ashok Shah recently said, “Gold and the precious metals are taking on the function of an alternative currency.” He also noted, “As we go into the next 1-4 quarters, the role of precious metals as alternative currency will become much more paramount.” The dollar is under extreme broad selling pressure which fueled by speculation of what the FED will do next.
The demand for physical gold is strong, and scrap selling is light contributing further to the increases according to Asian dealers.
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