Claudia Carpenter and Sungwoo Park
Oct 6, 2010
Gold rose to a record in London and New York, and silver extended gains to a 30-year high, on speculation that government spending and low interest rates to revive economic growth will weaken currencies and boost demand for precious metals as an alternative asset.
The dollar fell to an eight-month low against the euro after Japan’s decision to lower interest rates and buy $60 billion of assets bolstered expectations the Federal Reserve will take more steps to reinforce growth. Gold has climbed 23 percent this year as low rates made the metal more competitive against bonds and cash. Unlike bonds, gold doesn’t pay interest.
“More quantitative easing means de facto lower interest rates, so gold becomes more competitive,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland.
This article was posted: Wednesday, October 6, 2010 at 4:09 am