LONDON—The spot price of gold rose as investors viewed the U.S Federal Reserve's new round of monetary easing as a harbinger of a long period of low interest rates and a weakening dollar.
Spot gold recently was up $14, or 1%, to $1,362.80 a troy ounce as the euro climbed to $1.4223, from $1.4121 late Wednesday in New York. The metal hit a record $1,387.15 on Oct. 14.
The Fed's announcement Wednesday that it will buy $600 billion in Treasurys by the ende of June reinforces the argument for buying gold, said Jeremy East, global head of commodities trading at Standard Chartered.
"The dollar's going to carry on weakening, interest rates are going to remain low for a long time and commodities will remain on a roll," he said.
Gold traditionally performs well during periods of low interest rates since holding gold, which yields no dividends or interest, can be just as attractive as holding bonds.
Many market participants also believe gold can protect against the inflation that monetary easing may generate in years ahead.
In other precious metals, spot silver was up 50 cents, or 2%, at $25.29 an ounce, spot platinum was up $31, or 1.8%, at $1,734 an ounce and spot palladium climbed $22, or 3.4%, to $667 an ounce.
