Gold Overtakes 11-Month High, Looks Poised to Takeout $1800
As of Thursday, gold levitated seemingly briefly at its highest levels since last November, trading just $5 below a key $1,800 per ounce level, as the European Central Bank has elected to keep interest rates at very low levels. The euro remained strong, thus weakening the dollar and supporting the precious metals, as ECB president Mario Draghi told that the bank’s debt-buying plan had reduced tensions, although economic growth essentially stagnated. Gold made its 11-month high when it reached $1,794.40 per ounce, but broke through that level in Asia trading.
Low interest rates and QE forever have stimulated precious metals price gains, especially gold and silver. The ECB has kept its main interest rate unchanged at .75%, and the Bank of England continued easing with a record low .5% interest rate. Investors are still bullish on gold, with gold-backed exchange-traded funds holding an increasing 74.152 million ounces of Gold as of October 2, barely off its record high of 74.288 million ounces hit in late September.
Gold is climbing back to the bottom of its last peak levels, when it hit more than $1900 an ounce last September. This was on the heels of a gridlocked fiscal cliff debate as well as a downgrade of US debt. AU trades much higher than its recent highs, which since June have formed gold’s tops at $1640, $1650. From $1700 on gold has been consistently setting recent highs.