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
TheStreet Open House

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

Stocks in this article: GGRGLDABXNEMGLDIAU

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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,614.81 +215.14 1.31%
S&P 500 1,941.28 +37.27 1.96%
NASDAQ 4,419.4780 +103.4040 2.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs