Gold rises to record high after Bernanke's vow to keep lose monetary policyThe shiny metal rose to record high on Thursday trading, continuing yesterday's rally after Bernanke's pledge to keep interest rate low to boost growth which reinforced demand on gold as store of value.
The Fed opted to leave interest rate low at the range between 0.0% and 0.25% and continue the 600 billion bond-purchase program which is scheduled to end in June, pushing the dollar lower.
The previous session, gold added $20.20 or 1.34% after closing at $1526.70, while gold price was setin London at $1511.00 per ounce inclining from $1508.00 during the AM fixing.
Spot gold is trading at $1530.80 an ounce after recording all-time high of $1533.30 and a low of $1524.10.
The dovish tone by the chairman of the Fed passed the feelings to investors that the Fed will not tighten monetary policy any soon, hence encouraging them to leave the dollar and purchase high-yielding currencies.
Gold has benefited from a number of factors this year to reach new high records. Escalation of European debt woes, Japanese nuclear leaks and elevating inflation were the main factors along with the dollar weakness.
Yet, gold is gaining more momentum now from the dollar's depreciation. The dollar index, which tracks the dollar movements versus a basket of major currencies, fell to the lowest level since July 2008, touching a low of 72.87 compared with today's opening level of 73.29.
With the Fed keeping lose monetary policy and other central banks started tightening, especially the ECB which hiked interest rate in April, the dollar is predicted to show more vulnerability, thereby giving further strength to gold which is estimated to reach $1700 by the end of the current year.
Among other precious metals, platinum plummeted to $1817.00 from the day's opening of $1823.50, palladium inched down to $766.00 from $766.50 and silver edged down to $48.10 from $48.46, as of 07:40 GMT.