Gold settles at record high on Fed talk
Prices rally after Fed chief Ben Bernanke says the government would consider more monetary easing. Silver tops $30 an ounce.
By Andrea Tse, TheStreet
Updated at 3:06 p.m. ET
In an interview with "60 Minutes" over the weekend, Bernanke signaled that the central bank could expand its $600 billion bond-purchase program to address the high unemployment rate.
Fueling inflation sentiment, the announcement, coupled with ongoing uncertainty about the eurozone's ability to contain its debt crisis, helped push gold futures into positive territory. .
Gold for February delivery rose $9.90 to settle at $1,415 an ounce at the Comex division of the New York Mercantile Exchange, above its previous high close of $1410.10 set on Nov. 9, but shy of its all-time intraday high of $1,424. Gold today traded as high as $1,422.40 and as low as $1,409.80.
Bernanke said he hopes the Fed's bond buying will lower bond yields and encourage investment in stocks -- boosting business activity and economic growth in the country.
The U.S. dollar index was rising 0.2% to $79.56, while the euro was down 0.5% to $1.33 versus the dollar. The spot gold price was adding $2.80, according to Kitco's gold index.
"With Big Ben . . . spouting that kind of stuff about the economy and the possibility of more (quantitative easing), I'm surprised at the dollar buying this morning. I guess it's a bond buying thing, as yields on Treasuries have dropped from Friday morning's levels," EverBank World Markets President Chuck Butler wrote in a morning note.
Bernanke said fears that the Fed would be printing more money and taking inflation risks through its bond purchases are a myth. He said the Fed isn't printing money when buying Treasurys and the purchase won't result in a significant expansion of money circulating in the market, The Associated Press reported.
Gold prices approached new highs Friday, driven by a particularly disappointing November U.S. unemployment report. Investors fled for security in precious metals as the Labor Department reported that nonfarm jobs rose 39,000 as the private sector increased jobs by 50,000. The unemployment rate rose to 9.8%, the loftiest level since April. All the results were greatly below expectations.
Silver prices added 46 cents at $29.74 per ounce after briefly breaking the $30 mark for the first time since 1980. Copper closed up 1 cent at $4.01 per pound.
Freeport McMoRan Copper & Gold (FCX) was adding 1.4% at $110.44, while Barrick Gold (ABX) was 1.3% higher at $54.72. Gammon Gold (GRS) was gaining 0.4% to $7.82 and Hecla Mining (HL) was up 5.1% to $11.03.
The stock market is down substantially when measured in gold and silver money vs. paper money, backed by nothing.
Wait until oil shoots above $120 again!
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[BRIEFING.COM] S&P futures vs fair value: -4.30. Nasdaq futures vs fair value: -9.30. The stock market is on track for a lower start as futures on the S&P 500 trade four points below fair value.
Index futures have retreated from their overnight highs following another round of disappointing data from China. This time, it was the Foreign Direct Investment report, which revealed a 1.8% decline (previous -0.4%), leading to concerns about a potential hard landing.
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