Gold Keeps Making New Highs!
Gold continue its meteoric pace higher, this time trading up to 1913.50 overnight, before selling off a bit to start the US session. Dollar weakness has been the major driver of this move and is likely to continue throughout the week heading into Friday’s Fed speech in Jackson Hole.
Much of this move has to do with fear of US Fed monetary policy and whether or not Bernanke will move to become more accomodative, essentially weakening the Dollar further. At the last FOMC meeting, Beranke announced interest rates would remain low until the middle of 2013 which has contributed to the weakness of the Dollar and the rise of gold.
The only thing keeping the Dollar from freefall has been the Euro debt crisis which has acted as a sort of counter-balance for money flows. This has also caused hot money to rush into both the Swiss franc and Japanese yen to the point where those countries’ Central banks have been threatening monetary intervnetion.
Will gold continue to move higher as Friday approaches? Will gold go “parabolic” on Friday if Bernanke hints at further easing? Stay tuned!