Gold prices reach $1,360 after Federal Reserve minutes-Sergei Balashov-Proactive Investors

Gold prices reach $1,360 after Federal Reserve minutes-Sergei Balashov-Proactive Investors
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Gold prices reach $1,360 after Federal Reserve minutes
Wednesday, October 13, 2010 by Sergei Balashov
Gold got close to its recent record level of US$1,364.9/oz after the US dollar slipped on the back of yesterday's minutes from the latest meeting of the Federal Open Market Committee (FOMC), showed increasing support for further quantitative easing.
Commodity and currency markets
did not respond for the news immediately, however, after a short pause, gold started going up, while the US dollar fell against other major currencies with the EUR/USD rate sliding to nearly 1.40.
The Federal Reserve is expected to print more money and buy more debt, which would boost inflation and provide more support for the ongoing recovery.
Gold is seen as one of the main safe haven assets and an inflation hedge, as well as an alternative investment to the US dollar, usually moving inversely to the American currency.
Goldman Sachs (NYSE:GS) has upped its price targets for gold to US$1,400/oz, US$1,525/oz for three and six months respectively.
The investment bank's 12 month forecast was raised to US$1,650/oz.
Gold stood at US$1,360/oz in late afternoon. Silver and platinum followed, reaching US$23.55/oz and US$1,696/oz respectively.
Major mining stocks were in demand today. Gold producers African Barrick Gold (LON:ABG) and Randgold Resources (LON:RRS) advanced 3.2% and 2%. Silver miner Fresnillo (LON:FRES) also gained 2%, while platinum miner Lonmin (LON:LMI) climbed 3%.
Midcaps did even better as Aquarius Platinum (LON:AQP) and gold miner Petropavlovsk (LON:POG) rallied 5.5% and 4.4% respectively, while silver producer Hochschild Mining (LON:HOC) added 2.3%.
Zheng Guang gold-silver-zinc project in Heilongjiang Leyshon Resources (LON:LRL) and Australia operating gold miner GGG Resources (LON:GGG) were among the top performing stocks in the sector with gains of 11% and 10% respectively.
South Africa and Mozambique focused gold miner Pan African Resources (LON:PAF) 8%.
Source: http://www.proactiveinvestors.co.uk/companies/news/22036/gold-prices-reach-1360-after-federal-reserve-minutes-22036.htm/