Gold price is likely to remain well supported

The gold price climbed $13.87 to $1,656.19 per ounce Thursday morning after the European Central Bank and Bank of England each kept their benchmark interest rates at record lows. The 0.8% gain in the spot price of gold was also fueled by weakness in the U.S. dollar, which fell 0.5% against a composite of the world’s leading currencies. The euro rose 0.7% to near 1.28 against the dollar as well after better than expected sovereign debt auctions in Spain and Italy.

In terms of specific economic factors, the Beige Book pointed out that consumer spending “picked up in most Districts, reflecting significant gains in holiday retail sales compared with last year’s season.” Demand for nonfinancial services – including professional and transportation services – strengthened further as well. “Manufacturing activity generally continued to expand,” while “reports from financial institutions generally indicated a slight uptick in loan demand by businesses, along with improvements in overall credit quality.”

In spite of the largely positive economic picture represented by the Beige Book, the gold price maintained its gains as investors were able to digest the Fed’s report. The resiliency of the price of gold indicated that although the economy may indeed be improving, the Ben Bernanke-led central bank is unlikely to alter its dovish stance on monetary policy anytime soon.

The need for continued accommodative monetary policies was also emphasized this week by two new voting members of the Federal Open Market Committee – John Williams and Sandra Pianalto, Presidents of the San Francisco and Cleveland Federal Reserve Banks, respectively. In their first public speeches since becoming FOMC voting members, each argued that the challenging U.S. employment market is likely to take many more years to properly heal.

Williams asserted that “In this situation, it’s vital that the Fed use all the tools at its disposal to achieve its mandated employment and price-stability goals.” So long as these “tools” continue to involve the use of near-zero interest rates and dovish rhetoric, the gold price is likely to remain well supported.


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Malaysia Gold Investment

I found Gold Investment in Malaysia is a vary good tools to make profit when the market is down. I also found that Gold Price go up and down more slower compare to share market so to make money in long term, Gold is the right tools. This blog is all about Malaysia Gold Info and the way to make profi

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