Gold tops $1,550 an ounce; silver soars
Prices continue to rally as the dollar weakens and European inflation accelerates ahead of expectations.
By Andrea Tse, TheStreet
Updated at 2:35 p.m. ET
Gold (-GC) for June delivery shot up $25.20, or 1.6%, to settle at an all-time high of $1,556.40 an ounce on the Comex division of the New York Mercantile Exchange. Spot gold prices were up $25.70, according to Kitco's gold index.
Silver (-SI) prices for July gained $1.06, or 2.2%, at $48.60 an ounce.
Gold and silver futures built on Thursday's gains, as European inflation accelerated to 2.8% in April, which was much higher than the 2% European Central Bank target. European inflation rose at its fastest clip in two and a half years amid soaring energy prices.
The U.S. dollar index was slipping 0.2% Friday to $72.93. Since Wednesday's comments by Federal Reserve Chairman Ben Bernanke, the dollar has been weakening while the metals have rallied. Silver prices have risen nearly 8% since Tuesday's close, while gold gained 3.5% over that time.
The unanimous decision by the Fed to keep interest rates between 0% and 0.25% until at least the fall and to keep its balance sheet the same size after quantitative easing ends in June means cheap money will stay in the system for the medium term.
The Fed will reinvest its profits from its current $600 billion bond-buying program back into the market not adding extra cash but not taking any out either. Inflation forecasts were also below the Fed's 2% target, which means the central bank would like to see more inflation. Some experts are calling this “QE 2.5,” saying that this leaves the door open to a third round of quantitative easing, or QE 3.
"You'd almost think Ben Bernanke wants Americans to dump the dollar and switch into precious metals," said Adrian Ash, head of research at BullionVault.com.
Gold mining stocks, a risky but potentially profitable way to buy gold, were mostly higher Friday. Kinross Gold (KGC) was up 1.2% at $15.88, Goldcorp (GG) was rising 1.5% to $55.89, Agnico-Eagle (AEM) was soaring 3.1% to $69.64, and Eldorado Gold (EGO) was rallying 2.4% at $18.33.
Copyright © 2014 Microsoft. All rights reserved.
[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'