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Gold Price Set to Challenge $1,400

Release Date: 
Friday, February 18, 2011

GOLD PRICE NEWS - The gold price held firm as the People’s Bank of China ramped up its fight against budding inflation pressures. The price of gold traded near unchanged at $1,384.25 per ounce after news that the PBOC raised banks’ reserve ratios 50 basis points, effective February 24. If the gold price is able to close in positive territory today, it will have risen every day this week.

Gold prices have held firm despite the fact that Chinese policymakers have undertaken a series of measures - including interest rate hikes - in order to cool its economy and contain inflation. Food inflation has been a primary concern as the working class in the developing world devotes an outsized portion of their incomes to purchase food. While emerging nations step up their fight against inflation, Fed Chairman Bernanke shows little signs of deviating from his zero interest rate and quantitative easing policies - a fact that has helped buoy not only the gold price, but nearly all asset classes.

Precious metals have been strong as the U.S. Fed continues its commitment to keep easy monetary policy in place despite soaring commodity prices. Silver has gained 13% this month, gaining at a multiple of the gold price, which has appreciated 4% in February. At $31.71 per ounce, silver is trading at its highest level since 1980 when the Hunt Brothers attempt to corner the market sent the price to $50 per ounce.

The gold price has now recovered more than half of the $118.72 slide it endured from its $1,432.50 all-time high on December 7, 2010 to its $1,313.78 multi-month low on January 27. Furthermore, the price of gold is on pace for its third consecutive weekly gain and looks poised to reclaim the $1,400 level in short order.

Article provided by GoldAlert.com.


This article is independently provided by GoldAlert.com and does not represent the views or opinions of Goldline International, Inc. Although the information in this article has been obtained from sources believed to be reliable, Goldline does not guar­antee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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