WWas S&P downgrading government bonds essentially an upgrade for gold?
*Bloomberg, by Tony C. Dreibus and Madelene Pearson, August 10, 2011 :
''Gold Advances After Federal Reserve Pledges to Keep Rates at
All-Time Low
Gold gained for a third session in New York after the U.S. Federal
Reserve pledged to keep its benchmark interest rate at a record low
through at least mid-2013, boosting demand for the metal as a
protection of wealth.
The Fed also discussed a range of policy tools to bolster the economy,
fueling speculation the central bank may consider a third round of
quantitative easing through bond purchases to revive a recovery
described as ''considerably slower'' than anticipated.
''Rising interest rates tend to detract from gold as investors looking
for yields will look elsewhere,'' Darren Heathcote, head of trading at
Investec Bank (Australia) Ltd., said by phone from Sydney. ''As long as
rates stay low, particularly U.S. dollar, it will help to support gold,
if not push it higher in due course.''
Gold futures for December delivery climbed $25.50, or 1.5 percent, to
$1,768.50 an ounce by 7:58 a.m. on the Comex in New York, after
yesterday reaching a record $1,782.50.
Bullion for immediate delivery gained $25.67, or 1.5 percent, to
$1,766.07 an ounce in London. The price reached an all-time high of
$1,780.10 yesterday and is up 24 percent this year, heading for an 11th
year of gains.
Bullion rose to $1,753.75 an ounce in the morning ''fixing'' in London,
used by some mining companies to sell output, from $1,736 at
yesterday���s afternoon fixing.
Gold reached records after Standard & Poor���s cut the U.S. credit
rating by one level from the top AAA grade on Aug. 5. The S&P
announcement, combined with Europe���s sovereign debt crisis, spurred a
rout in global equities and stoked concern that the U.S. may lapse into
another recession.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
Call Now
Let us help you:
Personal Advisors
available now at
1-800-444-8317