Gold climbed to a record for a fifth straight day as the dollar slumped after the Federal Reserve said it was willing to ease monetary policy further to boost the U.S. economy.
Bullion for immediate delivery advanced as much as 0.3 percent to $1,291.05 an ounce before trading at $1,288.68 at 2:30 p.m. Melbourne time. Gold, which often moves counter to the dollar, has advanced 17 percent this year and is heading for its 10th annual gain.
“It continues to look bullish,” Peter McGuire, managing director at CWA Global Markets Pty, said by phone from Sydney today. “There are more worries about debasing of currencies, printing of money and quantitative easing.”
The Fed will continue to monitor the economic outlook and is “prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate,” the Federal Open Market Committee said yesterday in a statement in Washington.
Gold for December delivery on the Comex in New York gained as much as 1.4 percent to an all-time high of $1,292.50 an ounce before trading at $1,289.20.
The U.S. currency continued its decline against a basket of six major counterparts, dropping to the lowest level in six weeks. The dollar last traded at $1.3294 per euro.
Gold may advance to between $1,350 to $1,400 before the end of the year, CWA’s McGuire said. Economic uncertainty in Europe as well as in the U.S. would help support demand for haven investments, he said.
The National Bureau of Economic Research said Sept. 20 that the worst U.S. recession since the 1930s ended in June 2009. Still, unemployment in the U.S. may stay above pre-recession levels until at least 2013, the Organization for Economic Cooperation and Development said in a report the same day.
The Fed has kept its benchmark interest rate at zero percent to 0.25 percent and purchased mortgage-backed securities and Treasuries to help bolster the economy.
Silver for immediate delivery dropped 0.3 percent to $20.9175 an ounce after yesterday advancing to $21.075 yesterday, the highest level since March 2008.
Platinum climbed 0.3 percent to $1,628.65 an ounce and palladium was little changed at $535.40 an ounce.