NEW YORK (
Wednesday reached $1,150 an ounce as investors bought the precious metal on the
promise of low interest rates.
Gold for June delivery was up $14.30 to $1,150.30 an ounce at the Comex division of the New York Mercantile Exchange. Prices Wednesday have traded as high as $1,154.20 and as low as $1,133.30. The
was adding 0.08% to $81.46. Gold's spot price was rising $13, according to Kitco's gold index, as physical demand out of India increased.
Gold prices were bucking a stronger U.S. dollar and finding support from traders after the Bank of Japan held key interest rates at 0.1% and reassurance from the Federal Reserve that it's more concerned with economic conditions than tightening rates. Although there are members pressing for a rate hike, Chairman Ben Bernanke said Wednesday that the Fed's monetary policy would support much-needed employment growth over the long term and that inflation was not an immediate concern. The news from the Fed's Federal Open Market Committee minutes and Bernanke's speech wasn't enough to pressure the dollar or spark inflation fears, but it was enough to push gold past its $1,150 resistance area.
Gold's New All Time High
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After breaking the $1,150 area, many analysts believe momentum buyers could push gold to its high of $1,227. In the meantime, gold continues to make new highs in euro terms, which is helping spur investment demand. Continued Greek debt fears about how the country will raise enough money to cover its outstanding coupons and repayments while battling higher interest rates, is hurting the euro. Investors are moving out of the paper currency and into gold as an alternative investment.
"We're seeing demand on the physical side from the long early fund buyers and also some strong demand coming out of India," says Will Rind, head of U.S. operations for ETF Securities.
India is the global leader in gold consumption buying over 400 tons in 2009, a 19% decline from 2008. India has previously been in hoarding mode as the price of gold skyrocketed and cash-strapped consumers either bought less expensive gold or none at all. Many analysts are looking for an uptick in Indian consumer demand to be supportive of higher gold prices.
were up 21 cents to $18.14 while copper was down 3 cents at $3.57. Palladium continued higher, after reaching another all-new high, to $507.
, a more leveraged way to
, were popping even as the
Dow Jones Industrial Average
pulled back from 11,000.
was rising 3.22% to $40.69 while
was up just over 1% to $54.03. Other large-cap miners
were trading over 3% higher at $18.35 and $39.82, respectively.
Freeport McMoRan Copper & Gold
were 2.43% lower at $85.21 while
was rising 3.00% to $10.55.
Shares of the popular physically backed ETF,
SPDR Gold Shares
were higher by 1.27% to $112.36. Tonnage has remained unchanged since last Monday as investors turn to alternative ways of investing in gold.
Written by Alix Steel in New York
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.