15th July 2011
Bloomberg's Gold Price Alert reports that gold hit such heights not just because of concerns about a political row in the US over raising the debt ceiling but also because everyone is playing a game of will they? Won't they? over whether the US will embark on quantative easing mark 3.
The website reports as follows – "On Thursday, the gold price held firm despite efforts by Fed Chairman Ben Bernanke to back away from prior comments indicating that QE3 was a possibility. The price of gold reached a new record high of $1,594.50 per ounce in morning trading, but fell to $1,582 after Bernanke testified to the U.S. Senate that now is not the time for additional monetary policy easing.
However, as trading progressed, the gold price bounced back into positive territory and finished higher by $4.27 at $1,586.65 per ounce."
US quantitative easing parts one and two have been blamed for stoking emerging market economies' inflation and would not be welcomed in most parts of the globe.
As gold is a well known inflation hedge as well as a safe haven, then this fear must be having some bearing on the price.