By: DailyForex.com
After months of decline, the price of gold is moving upwards. Gold jumped to a one-month high from London to Shanghai and Tokyo as prospects of the U.S. Federal Reserve sustaining its stimulus package began to hurt the dollar. The price increase was also a direct result of the possibility of higher oil prices boosting inflation.
Following Fed Chairman Ben S. Bernanke’s indication that it was premature to decide whether to begin scaling back bond purchases come September, gold rose 0.8 percent last week, capping the first back-to-back weekly gains since May. The Bloomberg Dollar Index dropped for a second day, while crude in New York climbed for a fourth session after settling at a 16-month high on July 19.
Bernanke’s comments seem to have prompted the return of positive sentiment towards gold with the price of gold for December delivery advancing as much as 2.4 percent to $1,325 an ounce on the Comex, the highest since June 20. According to data put out by the U.S. Commodity Futures Trading Commission, speculators have increased their net-long position 56 percent to 55,535 futures and options by July 16, the highest since June 4.