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Gold Rallies as Traders Expect Stimulus from Central Banks

November 9, 2012 at 0:51 by Vladimir Vyun

Gold rallied as expectations of stimulus measures from central banks increase the appeal of the precious metal. While the reelection of Barack Obama was received negatively by markets initially, now investors changed their stance somewhat. Obama as president means that Ben Bernanke stays as Chairman of the Federal Reserve and that means quantitative easing remains in place. Such way of thinking is positive for gold.

The European Central Bank did not ease its monetary policy at yesterday’s policy meeting and that unpleasantly surprised some market participants. Yet ECB President Mario Draghi reiterated that the bank is ready to start its bond-buying program:

As we said before, we are ready to undertake OMTs, which will help to avoid extreme scenarios, thereby clearly reducing concerns about the materialisation of destructive forces.

Gold rallied from $1,716.62 to $1,733.45 on COMEX yesterday, reaching the highest close since October 19.

If you have any questions and comments on the commodities today, use the form below to reply.

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