Gold exchange traded funds showed no signs of stopping their recent climb on Wednesday as ETFs tracking the metal climbed 3% and futures touched $1,800 an ounce.
Gold prices were rising after the Federal Reserve on Tuesday afternoon said it would keep interest rates at rock-bottom levels until mid-2013 at least.
“Low interest rates should still be bullish for gold in the longer term, with the possibility of higher inflation tempting investors towards physical assets,” a trader told FastMarkets.
“It’s (because of) the stock market. People are just looking for a place to put their money,” said Kevin Grady, gold trader on the Comex floor with MF Global, in a Kitco News report. “The bottom line is the euro zone has a tremendous amount of problems and they have no answers over there. In the United States, the Fed came out yesterday and said we’re going to keep interest rates for two years basically flat. They’re saying that’s all we can do.”