Gold prices bounced back firmly on Friday and were close to testing the $1360 an ounce level. Recently, the price of the yellow metal made a new historical level of $1387 an ounce. While the amount is not yet known, it seems certain that the US Federal Reserve will implement its program of further quantitative easing citing high unemployment and low inflation as the cause. In order to prevent any further deterioration in unemployment in the US, the economy needs to have a steady GDP growth of at least 2%. Personally, I doubt that this new round of monetary expansion is going to have any major effect on the high unemployment rate in the US, but I am certain that this action will lead to the further debasement of the world's reserve currency. And, as this happens, we can expect to see further dollar weakness which will certainly be highly supportive for gold. Gold is an international currency and it is among the most liquid assets in the world. It can be readily bought or sold 24 hours a day in one or more markets around the world. And, the price is very transparent and can be seen anytime no matter where you are.......read on
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