Gold Reaches a Record $1,340.50 an Ounce on Monetary Policy Expectations
Spot gold increased almost 2%, to $1,340.50 an ounce, while U.S. gold futures for December delivery rose $23.50 to $1,340.30, the wire service said. Spot gold's intraday high of $1,341.20 marked its seventh record price in the last eight trading sessions.
Gold is seen a safe investment as countries look to boost their economies by using monetary policy to increase liquidity and cut borrowing costs. The Bank of Japan cut interest rates, while Federal Reserve officials have said they'd support buying more Treasury bonds to help reduce the cost of borrowing.
Last month, GFMS Ltd. put out an industry report saying that gold would likely surpass the $1,300-an-ounce mark, Reuters reported at the time. While the U.S. has avoided the sovereign-debt crises that have impacted other parts of the world, that may change, potentially causing devaluation of the dollar, Reuters said, citing GFMS Ltd. Chairman Philip Klapwijk.