This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Prices Climb on Speculation of Added Fed Easing (Update 1)

Updated from 11:58 a.m. EST with settlement prices

NEW YORK ( TheStreet) -- Gold prices climbed Monday on speculation that the Federal Reserve may bump up its buying of mortgage-backed securities.

Gold for February delivery tacked on $8.90 to settle at $1,714.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,718.80 and as low as $1,703.30 an ounce, while the spot price was adding $8.20, according to Kitco's gold index.

"It looks like they're going to make some adjustments to the dollar amount on the buyback program," said Phil Streible, senior commodities broker at RJO Futures. "So a lot of people are buying metals ahead of that."

Silver prices for March delivery increased 25 cents to close at $33.38 an ounce, while the U.S. dollar index was slipping 0.07% to $80.35.

The Federal Open Market Committee -- the Fed's policy-making wing -- will announce its decision on interest rates Wednesday and provide its economic forecasts.

The Fed currently has an open-ended policy of buying back $40 billion a month of mortgage-backed securities.

The Fed could announce in its next meeting that it may double down on these purchases, according to Paul Ashworth, chief U.S. economist at Capital Economics, CNN reported.

Increased central bank purchases would be seen as greater inflationary policy, which would make gold a hedge investment.

The possibility of this move would come as Operation Twist reaches its expiration date.

Uncertainty in Europe resurfaced over the weekend when Italian Prime Minister Mario Monti announced his decision to resign once the country's 2013 budget passed. The decision opened up the possibility for former Prime Minister Silvio Berlusconi to return as the head of government.

Berlusconi, at times, has been a lightning rod of unpredictability in the eurozone. Monti replaced Berlusconi in November 2011 when the 10-year bond there had spiked to 7.48%. As European finance ministers continue their efforts to bring more economic stability to the region, it's unsure as to what stability Berlusconi may bring.

The euro may be bucking those worries as it was slightly higher than the U.S. dollar on Monday, rising to $1.2933 from Friday's close at $1.2926.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GLD $121.97 -0.20%
ABX $17.85 2.20%
GG $18.62 0.87%
NEM $32.58 0.71%
RGLD $59.16 0.75%


Chart of I:DJI
DOW 17,694.78 +43.52 0.25%
S&P 500 2,055.41 +4.29 0.21%
NASDAQ 4,732.6950 +7.0560 0.15%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs