Gold rose for a three straight sessions, peaking at $1797.17 (at 11am EST) in New York trading today, marking another record high to beat yesterday’s.
Investors are feeling to safe haven metal as central banks in major countries are keeping interest rates low. Thus investors have nowhere else to look for higher yields and turn to gold to protect their wealth.
Yesterday the U.S. Federal Reserve pledged to keep its benchmark interest rate at a record low for at least two years, through mid-2013.
The FOMC statement mentioned that U.S. economic recovery was considerably slower than anticipated and discusses a range of policy tools to bolster the economy, fueling speculation the Fed may consider a third round of quantitative easing through bond purchases to revive the economy.
Recently the Bank of England also kept its key interest rate unchanged at a record low 0.5 percent, and the Swiss National Bank cut its interest rate in an effort to curb the Swiss franc’s appreciation. The Swiss franc is perceived as a safe haven currency in times of financial turmoil, which has driven up its value recently. With the SNB’s determination to keep the franc from rising further in order to protect its exports, the currency weakened today., thus pushing investors to the only safe haven, which is gold.