Gold continues to soar on back of weak dollar

The price of gold continues to surge after the US Federal Reserve hinted that it is prepared to inject more money into the economy, if needed.

In a statement, the Fed said it would “continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate”.

The news sent the price of gold to $1,293.35 an ounce on the London Bullion Market as the dollar fell over concerns that the US economic recovery may be faltering.

“A combination of a weakening dollar and the Federal Reserve indicating it may loosen monetary policy further is pushing gold to record highs,” ETX Capital senior trader Manoj Ladwa told AFP.

The rise of the price of gold recently has been attributed to a weakening US dollar, which typically moves in the opposite direction to the precious metal.

According to CMC market analyst, Michael Hewson, gold will eventually hit the $1,300 mark.

He said: “Perceptions that the Fed will look to further ease monetary policy into year-end will underpin gold and help push it above 1,300 dollars as investors seek better stores of value.”

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