The price of gold edged up again on Tuesday, driven by a falling dollar. On the Comex in New York, gold futures for December delivery briefly reached $1,231.10 per troy ounce, the highest price since July 1, reported Bloomberg News.
Equities also had a positive day, with the major indexes up 1 to 2 percent. Risk appetite improved this month, according to a Bank of America/Merrill Lynch survey. Silver futures gained, rising 0.7 percent to $18.615 per troy ounce.
Investors have lost some confidence in the dollar, which lost ground to the euro, the British pound and the Australian dollar.
The Federal Reserve’s actions earlier in the month helped assuage the fears of some investors that deflation would set in, as the central bank committed to keeping its balance sheet stable rather than contracting the monetary supply. For inflationistas, however, the Fed’s actions were a sign that the dollar was on the path to devaluation.
Many institutional and retail investors have turned to gold and other precious metals recently, in a bid to protect their investments against what they perceive as the most immediate danger to the U.S economy: inflation.
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