Gold prices recently hit an all time high in Singapore as the U.S. dollar continued its drop against a basket of currencies on expectations that the Federal Reserve is likely to announce new measures to bolster the economy.
Similarly, silver surged to a 30 year high and palladium climbed to a five-month high tracking base metal prices.
Analysts believe that the Fed is preparing a fresh round of quantitative easing measures expected to be announced at the end of its early November meeting.
Gold went above the earlier $1,300 an ounce high to touch $1,312.05 before settling back to $1,311.55 with gold futures also surging to new a record.
“We are in a bullish mood,” says one Hong Kong based dealer confessed, “the economy in the U.S. is weak and the Fed will be launching some more rescue packages.”
Add federal budget deficits exceeding $1 trillion a year for several years to come, and an economy that can’t produce enough to sustain Barack Obama’s appetite to tax and spend, and investors are simply smart to short the dollar by loading up on gold. That’s why gold is $1,300 an ounce.
Where the price of gold stops and falls, nobody knows!