Gold prices have made the most out of a short trading week, and today jumped $10.50 to $1,704.50 an ounce at the Comex division of the New York Mercantile Exchange.
Gold, which one year ago today hit a historic high of $1,920 an ounce, came out roaring Tuesday after the Labor Day holiday. Gold closed up 2.55% to reach a more than five-month high of $1,700.
This came from increased investor hopes that the U.S. Federal Reserve will deliver QE3 to give the slowly-recovering economy a much-needed lift.
U.S. Fed Chairman Ben Bernanke's remarks from Friday's Jackson Hole, WY speech served as the gold price catalyst.
"Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability," said Bernanke, giving enough of a hint that QE3 was on the way in 2012.
Gold ETFs also started strong in September after a healthy performance in August.
On Tuesday, SPDR Gold Trust (ETF) (NYSE: GLD) holdings, the world's largest gold-backed ETF, increased to 1,293.138 tons. This is the highest level since mid-March.
GLD's price also jumped 1.77% to 163.36.
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