Gold and silver prices rose moderately Tuesday as the dollar
fell to a fresh four-month low ahead of the highly anticipated
Federal Reserve meetings Thursday and Friday at which it's
expected to announce a third round of quantitative easing.
PowerShares DB US Dollar Index Bullish (
), measuring the dollar against a basket of global currencies,
fell 0.70% to its lowest since the beginning of May. It has been
in a downward spiral since breaking below key price support at
its 200-day moving average in late August.
In the futures markets, gold rose 0.46% to $1,733 an
SPDR Gold Shares (
) added 0.36%.
Market Vectors Gold Miners ETF (
) ticked up 0.25%.
If the Fed decides against enacting more stimulus this week,
gold and silver could drop sharply. In that case, it will likely
say, as it has in the past, that it stands ready to act should
the need arise, which would be bullish for precious metals.
"This will ensure further currency debasement, which increases
the attractiveness of holding gold as a way of diversifying
foreign exchange holdings," wrote David Morrison, market
strategist at GFT.
"Central banks remain net buyers, and gold is increasingly
used as collateral and as a medium of exchange. Turkey and Iran
have both increased their gold imports, and the suspicion is that
Turkey is using gold to pay for Iranian oil."
Silver futures ticked up 0.33% to $33.55 an ounce.
IShares Silver Trust (
) added 0.39%.
Silver Miners ETF (
) rose 0.66%. Both SLV and SIL are hanging near five-month
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