Friday saw gold prices ending flat after reaching its highest level in four months on Thursday as hopes increased on the release of another round of monetary stimulus by the Fed. Platinum ended the week higher by five percent as the precious metal has gained almost nine percent for the month. This comes after violence broke out in a South African mine. Around 80 percent of the platinum in the world come from South Africa.
Bullion prices were 3.4 percent higher for the week, which is its biggest increase since January. The increase followed the release of the minutes of the meeting of the Federal Reserve for August. The minutes hinted of a possible release of additional stimulus unless a significant improvement in the economy was noted.
However another quantitative easing increased concerns of inflation in the future. The initial two rounds of quantitative easing resulted to the two-fold increase of gold prices.
The news has allowed gold to go past its near &100 range even as it surpassed its moving average for 200 days. The relative strength index of gold however gives indications that a slight overbuying is being experienced by the market after a rally that lasted for seven sessions.
Spot gold prices have decrease by $0.03 per ounce after it reached its highest level since April at $1,674.80. US gold futures set for delivery in December declined by $0.10 as the trading volume was 35 percent lower than the 30-day average. Gold ETF holdings have reached record levels at 71.253 million ounces.
The increase in gold prices has been encouraged by the possibility that the FED may be releasing the QE soon. A number of money managers have started to find gold more appealing at this time compared to the previous four months when gold prices remained in a $100 range.
Silver prices have increased by 0.4 percent at around $30.64 per ounce even as spot palladium prices have gone down by 0.2 percent at $648.47 per ounce.