Gold Rises to Record on Bets Dollar to Falter; Silver Advances

Gold rose to a record on bets the Federal Reserve’s stimulus plan to bolster the U.S. economy will erode the value of the dollar, boosting demand for precious metals as alternative assets.

Gold futures reached $1,397.70 an ounce as the greenback headed for the second straight weekly decline against a basket of six major currencies. Silver extended a rally to a 30-year high. The Fed said on Nov. 3 it would buy $600 billion in Treasuries through June to spur growth.

“Markets are realizing the impact of quantitative easing is a tremendous weakening of the dollar,” said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. “Ultimately, the Fed is slugging it out to make our currency as cheap as possible. That’s extremely bullish for gold.”

Read Full Article from BusinessWeek

- Posted: 2010-11-05 10:23:07

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