Gold Climbs Despite Market Gains
Though markets rallied Tuesday, gold (NYSE:GLD) prices continued to climb after the Federal Reserve announced that it would keep interest rates low through mid-2013 in order to help the U.S. economy, which has been growing weaker.
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Spot gold rose to $1,735.79 an ounce, up 2% as of close, and reached an all-time high of $1,778.29 earlier in the day. Benchmark U.S. gold futures for December delivery GCZ1 climbed to $1,753.50 per ounce after hours, an increase of 2.4% over Monday’s price, though down from its session high of $1,782.50 earlier in the day.
Gold’s (NYSE:GLD) gains seem incongruous with huge market gains. The Dow climbed 3.98% today, the S&P 500 rose 4.74%, and the Nasdaq rose 5.29%, a level of growth that would normally see gold decline. The fact that gold climbed despite market gains is likely due to confusion and anxiety on behalf of investors. However, gold prices did fall for much of Tuesday, not gaining a footing until midday trading. While investors were quick to take advantage of undersold stocks, they were wary about abandoning their gold reserves, which come with a level of inherent safety that few, if any, stocks can boast. Add an expectation that inflation may increase, and Gold bugs had the perfect recipe.