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Report: Gold Prices Nearly Triple During Bernanke Tenure

Release Date: 
Thursday, February 28, 2013

Gold fell on improved fourth quarter growth data in the U.S. while a firmer dollar also weighed on the precious metal. This was the second consecutive day of losses, but analysts at Commerzbank said they don’t “believe the current weakness in the price of gold to be sustainable.”  Gold was $19.60 lower at 9:09 a.m. Pacific Time on the New York Spot Market, at $1,577.70 per ounce.  Spot silver was $0.46 lower at $28.62 per ounce.  (Click here for the most current spot prices.)

Commerzbank analysts noted, “a number of aspects point towards higher gold prices: the Indian finance minister, for instance, announced no further hikes in gold import duties in his annual budget speech today.  Coupled with the lower local prices of late, this could give rise to growing gold demand in India in future.”

Research from Bespoke Investments Groups discusses gold’s rise during Fed Chairman Benrnanke’s tenure  during which gold prices have nearly tripled.  When appointed to his post on February 1, 2006, gold was $574 per ounce.  Since then, gold has gain $1,021.70, a 178% jump.

In Japan, Haruhiko Kuroda was nominated for the position of governor at the Bank of Japan, fueling hopes for easier monetary policy.  The dollar gained a bit against the yen after the news, a move that could benefit gold, said HSBC metal analyst James Steel.

“Both the Japanese yen and the Swiss franc are historically viewed as safe-haven assets, and depreciation of the two may lead investors to choose bullion, a currency that cannot be printed, which is also regarded as a safe-haven asset,” Mr. Steel noted.

(Sources:   “Gold Futures Fall on U.S. Economic Data, Stronger Dollar,” Wall Street Journal, February 28, 2013 “Gold futures waver; firmer dollar adds pressure,” Marketwatch, February 28, 2013; “Gold falls a second day, set for monthly loss,” Marketwatch, February 28, 2013; “Gold Demand in India Seen Rebounding After Import Tax Maintained,” Bloomberg, February 28, 2013; “Gold price nearly triples during Bernanke tenure: Bespoke,” Marketwatch, February 27, 2013)

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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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