Gold and Silver continue rising on Friday on inflation data that seems to have investors fleeing to safe haven assets. Gold and Silver prove to be strong assets during uncertain times.
Gold for June delivery was up $7.20, or 0.5% at $1,538.40 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, it struck a 52-week high at $1,541. The spot gold prices were less impactful, trading sideways at $1,536.80 an ounce, according to Kitco's gold index.
Silver prices for July moved $1 higher, or 2.2%, to hit $48.585 an ounce.
Gold and silver futures were extending Thursday's gains, as European inflation accelerated to 2.8% in April, which was much higher than the 2% European Central Bank target. European inflation rose at its fastest clip in two and a half year amid soaring energy prices.
Since Wednesday, the dollar has been weakening and gold and silver have been gaining, thanks to the unanimous decision by the Fed to keep interest rates at 0% to 0.25% until at least the Fall as well as keeping its balance sheet the same size after quantitative easing ends in June meant more cheap money for longer.
The Fed will reinvest its profits from its current $600 billion bond buying program back into the market not adding extra cash but not taking any away either. Inflation forecasts were also below the Fed's 2% target, which means the central bank would want more inflation. Some experts are calling this QE 2.5 and say that this leaves the door open to a third round of quantitative easing, or QE3.
"You'd almost think Ben Bernanke wants Americans to dump the dollar and switch into precious metals," said Adrian Ash, head of research at BullionVault.com.
Goldcorp(GG) was rising 0.7% to $55.44, while Agnico-Eagle(AEM) was up 1.9% to $68.83 and Eldorado Gold(EGO) was flat at $17.89.
-- Written by Andrea Tse in New York.
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