The price of gold pushed beyond the milestone mark of $1,600 per troy ounce on Tuesday, driven by conjecture about major central banks throughout the world considering the prospect of economy-spurring measures, according to
Anticipations are gaining momentum regarding intervention, which pulls down the value of paper money. The central bank of the U.S., host of the globe's largest economy, might be on track to deploy a third round of quantitative easing as soon as next month.
While gold advances when the U.S. dollar loses value, the yellowish metal benefits from conjecture about strategies that draw down the world's reserve currency.
"Bullion extended Friday's gains on a technical breach of $1,600," analyst Andrey Kryuchenkov with VTB Capital told Reuters on Tuesday. "Just as before, gold continues to track the broader market, with sentiment still upbeat in the wake of the euro zone summit in Brussels at the end of last week."
At 10:05 a.m. on Tuesday, gold futures climbed 1.21 percent, a $19.30 lift to $1,617 per troy ounce.
Policy makers with the European Central Bank are prepared to convene later this week to discuss interest rates and the VTB Capital analyst predicted note anticipations spreading about the body slashing the rates.
"Peripheral bond yields in the euro zone remain subdued from last week's highs, while many are expecting a rate cut by the ECB (of 25 basis points) on Thursday," Kryuchenkov told the news source.
Shifting west, economic data about manufacturing in the U.S. is on the wane, which follows slower returns from Europe and Asia. Concerns are spreading that the sovereign debt crisis has widened its grip beyond the 17-nation bloc and is beginning to clench the global economy.
Speculation about QE3, as the third round of quantitative easing in the U.S. in known, is growing very progressively, particularly during the past month or so, one analyst told the news source.
"Over the last few weeks U.S. numbers have worsened a lot and this has brought about the probability of QE3 - which is probably the most important reason for the market to believe in gold," analyst Eugen Weinberg with Commerzbank told the news source.
the yellowish metal soared to its highest price in nearly two weeks on Tuesday. Conjecture about the prospects of growth-spurring measures helped the yellowish metal emerge as a hedge against inflation.
One head dealer said expectations are running higher about the prospects of monetary easing.
"People are expecting some form of easing both in the U.S. and Europe," head dealer Frank McGhee with Integrated Brokerage Services in Chicago told Bloomberg. "The chatter is growing louder."
Thus far this year, the price of gold has climbed roughly 3.4 percent. During the 30 months from December 2008 to June 2011, while the U.S. Federal Reserve preserved borrowing costs' low rates, gold prices skyrocketed 70 percent in value.
The U.S. Federal Reserve purchased $2.3-trillion-worth of debt during the first two rounds of quantitative easing during that time period.
"Bullion prices have seen a positive start this morning on the back of quantitative-easing expectations," states a Tuesday report authored by analyst James Moore with TheBullionDesk.com, according to Bloomberg.
Commerzbank analysts noted the recent increases of bullion, stating also that the world's reserve currency has stepped back in value, according to
"The mood on the financial markets has generally been bright since the end of last week, and the U.S. dollar has weakened, on top of which gold is reaping the benefit of market expectations for further monetary easing around the globe to stimulate economic growth," states a note penned by the analysts, according to MarketWatch.