You are here: Home - Investing -

Gold hits highest since early May on Fed easing boost

0
Written by:
23/08/2012
The spot price of gold climbed by over 1% to $1,655 an ounce as the Federal Reserve said it is likely to ease monetary policy soon unless there is a sharp change in economic data.
Gold hits highest since early May on Fed easing boost

It is the first time the precious metal has risen above the $1,660 an ounce mark since early May, as investors waited for clarity on Fed policy.

The minutes of the latest meeting of the Federal Open Market Committee showed members were behind imminent further action, the Financial Times reports.  

“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the the minutes.

It also discussed a range of tools it could use to ease monetary policy further, including a third round of quantitative easing when it would buy more long-term assets.

According to the minutes: “Many participants expected that such a programme could provide additional support for the economic recovery both by putting downward pressure on longer-term interest rates and by contributing to easier financial conditions more broadly.”

The committee considered extending its forecast of low interest rates beyond the current date of “late 2014”. It said this could be particularly effective if it also stated rates will remain low even as the recovery progresses, according to the FT.

A couple of members raised the idea of cutting the interest the Fed pays to banks on their excess reserves or starting a programme to encourage banks to lend to households and businesses.

US equity markets rose in late afternoon on the news, with the S&P 500 recovering from a loss of 0.4% to close slightly higher.

Meanwhile, the dollar hit a two-month low against a basket of currencies while US treasury yields extended their decline. The yield on 10-year notes had dropped 11bps to 1.7% late in New York, the Financial Times reports. 

In last week’s Investment Week, we reported on managers following hedge fund investors to up their gold holdings ahead of a potential QE-driven rally. To read the story click here.

 

 

 

 

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2200632-greekeuro
Merkel and Hollande to hold talks as Greece pleads for more time

Angela Merkel and Francois Hollande will meet later this week to decide on whether to ease the terms of Greece’s...

Close