Fearing that the US Federal Reserve could devalue the dollar should it go on a buying spree to help support the economy, investors turned to the perceived safety of gold pushing prices to a record $1,313.20 an ounce. Meanwhile, the US dollar continued to fall, declining to a five-year low against the euro.
“Gold is flying because of concerns over a weakening dollar, and the prospect of quantitative easing,” said David Wilson, an analyst at Societe Generale. “Our internal house view is for a slight softening of the dollar over the next 3-6 months.”
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