Gold Prices Hold At 11-Week High

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The price of gold held near 11-week high levels as the metal benefited from investor expectations that U.S. monetary policy will remain ultra-loose boosted traders’ appetite for the safe-haven metal, Reuters reported.

According to the new outlet, a pledge by the U.S. Federal Reserve in January to keep interest rates at rock-bottom levels and several hints of more monetary easing has helped the precious metal. These moves by the Fed would help to keep the dollar weak and the opportunity cost of holding gold bullion low, as the commodity has risen 12.5 percent this year.

Federal Reserve Chairman Ben Bernanke defended the actions by the bank, noting the U.S. economy still needs support.

“Yesterday’s reaffirmation from the U.S. Fed (chairman) that he is committed to keep rates low… (has) given gold the necessary boost to hold gains and also break key resistance,” Pradeep Unni, senior analyst from Richcomm Global Services, told Reuters.

Bloomberg reported that gold held near the $1,760 an ounce mark, and analysts at Bank of America Merrill Lynch noted that bullion may reach $2,000 an ounce by the fourth quarter of FY2012.

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