Gold prices gained today following speculation that the Federal Reserve bank will continue with its $85 billion bond buying program (Quantitative Easing 3). Moves in gold prices this year have been tracking closely the shifting expectations about the possible scaling back of the stimulus program. Last week gold was under heavy pressure following statements by FED representatives that the central bank should slow down its bond buying or even shut it down in the near future, based on some positive information about the economy.
Sentiment has shifted last days though and the greenback retreated, which caused the precious metal to gain. On the Comex division of New York Mercantile Exchange gold futures for June delivery rose by 0,55% on the day and traded at $1384,85 a troy ounce following a previous increase of 0,7%.
Yesterday James Bullard, St.Louis Fed president, said that the central bank should not scale back its monetary stimulus program and continue with the same pace.
William Dudley, New York Fed president, seems to have changed his opinion and said he was previously overly optimistic about growth.
Howard Wen, HSBC Securities (USA) Inc. wrote to Bloomberg: “If Bernanke conveys a cautious tone about the economy. Gold historically has been highly sensitive to changes in monetary policies.”
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