Gold and Silver Prices Rise on US Quantitative Easing Stimulus
Gold and silver prices went up steadily on the assumption that the central bankers will act more aggressively in trying to stimulate their economies – particularly the US Federal Reserve. This will cause inflation, and gold is the traditional favorite hedge against inflation.
The Group of Seven – central bankers from France, Germany, Italy, Japan, United Kingdom, and United States – agreed to coordinate their stimulus packages to especially focus on the EuroZone’s overly indebted nations.
The last time the US Federal Reserve actions in quantitative easing measures was Dec 2008 and June 2011 where they injected $2.3 trillion into the economy. This caused tremendous inflation, and pushed gold prices to a record $1,923 per ounce in September 2011.
Gold August futures rose 0.4% to $1,62.90 per ounce.
Silver July futures rose 1.4% to $28.395 per ounce.
Gold seems to once again become the favored safe-haven instrument during times of volatility.
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