Los Angeles CA, June 20 (Tangible Investments) - by James O’Dell - The Gold price rallied sharply higher on Thursday, posting its biggest one day gain in nine months and adding a whopping $47.10 or 3.69 percent to close at $1,324.85 an ounce while remaining on pace for a third straight weekly gain. The price of Silver soared $0.90 or 4.52 percent to close at $20.79 an ounce, while the Gold/Silver ratio fell to 63.73.
Gold is up nearly 10 percent so far in 2014, making it one of the year's best performing assets. "Yesterday's $50/oz move higher was mainly due to higher inflation expectations in the U.S. and the fact that the Fed was not able to cool them," said ABN Amro's Georgette Boele."That was coupled with oil moving higher on the back of tensions in Iraq," added Boele. "As prices moved very quickly higher yesterday we had stop losses triggered and short-term traders taking profits."
In one day, the Gold price moved back above its 20-, 50- 100- and 200-day moving averages as well as its 20-week and 50-week MA. “A lot of technical buying is helping Gold,” said Phil Streible, of R.J. O’Brien & Associates. “We saw a lot of buying come in once the market moved above $1,300.” Many investors were waiting on the sidelines to hear from the Fed and they liked what they heard.
“Funds are returning to Gold as expected,” wrote RBC Capital Markets' George Gero in an email to clients on Thursday. The Fed’s statement “signaled expected continued low rates and not more than [the] expected tapering,” added Gero, and “all of this means the under-invested funds now are in a rush to re-enter the market which they left to financial investments.” Gold remains an effective hedge against depreciation in fiat currencies and market turmoil.
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