Gold prices rose 1% and silver 2% on Monday, after experiencing their first decline in about three months last week. These increases, as well as a new high for palladium, came after the U.S. dollar fell due to a lack of consensus over monetary and currency policy at the recent G20 meeting.
As spot gold hit $1,336.42 an ounce mid-day, December gold futures climbed $11.40 to $1,336.50, Reuters reported on Monday.
Saturday’s G20 meeting left the global economy with the status quo in currency markets, thus failing to stop sales of the U.S. dollar on expectations the Fed should unleash a second round of quantitative easing at its November 2-3 meeting, analysts say.
Metals experts at HSBC said Monday they expect gold prices to hit $1,400 an ounce if Federal Reserve policy includes the purchase of up to $2 trillion of bonds. A smaller purchase, of say $50 billion, could move the dollar higher and gold lower, though, they warned.
Continued uncertainty over the global economic recovery and inflation worries have pushed more investors to buy gold, which is up about 22% year to date, and other precious metals.