GOLD PRICE NEWS – The gold price touched a new all-time high of $1,780 per ounce early Tuesday morning. The price of gold, currently trading at $1,745 per ounce, gained as much as $117 over the past two days alone. S&P’s downgrade of the United States, combined with the flare-up of the sovereign debt crisis in Europe, has lit a fire under the yellow metal. Confidence in the integrity of paper currencies has eroded, leading investors to bid up gold prices to record highs.
The Federal Open Market Committee (FOMC) meets today and will deliver its policy statement at 2:15pm eastern time. With global markets experiencing severe turbulence in recent days, many are looking to Fed Chairman Ben Bernanke to stem the decline in global stock markets by announcing a new round of quantitative easing. Gold prices have been bolstered by the Fed’s proclivity to print money in order to spark an economic recovery. News over the weekend that the European Central Bank (ECB) was set to begin purchasing Italian and Spanish bonds helped fuel the gold price rally.
Today’s surge in the gold price follows yesterday’s $55.00 per ounce spike. The spot price of gold surpassed $1,700 per ounce for the first time ever on its way to new record highs. Goldman Sachs called for gold to rise to $1,860 per ounce within 12 months, while JP Morgan predicted that gold prices could touch $2,500 per ounce this year.
Silver fell over 2% to $37.95 per ounce early this morning despite the rally in the price of gold. As for precious metals equities traded higher Tuesday morning, Gold Fields (GFI), Kinross Gold (KGC), and Newmont Mining (NEM), which dropped 1.0%, 2.2%, and 0.5%, respectively, during yesterday’s trading session, all moved to the upside.