Gold, silver shining as Fed spurs commodity buying mumbai 2011
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Gold price hit a record high on Thursday, silver rebounded and aluminium touched an almost three-year peak as investors poured more cash into commodities after the U.S. Federal Reserve signalled it would extend its loose monetary policy and the dollar slid.
* Spot gold hits record at above $1,534 an ounce, silver up
* Aluminium, copper gain on weaker dollar
* Dollar sinks to a 3-year low; Fed in no rush to tighten
* Coming up: U.S. Q1 GDP preliminary at 1230 GMT
Investors bet that a rally in commodities, which has been fuelled by liquidity from a second round of quantitative easing (QE2), would press on -- at least in the short term.
It's gold and silver that have done the best, hence that gives us a signal that this isn't as much about optimism about genuine growth as it is about asset price inflation on the one side and a weak dollar and generally weak paper currencies on the back of it, said Sean Corrigan, chief investment strategist at Diapason Commodities management in Switzerland.
Commodities from copper and oil to corn and zinc rallied as investors chased higher returns after the dollar index, a measure of the greenback's strength against a basket of currencies, dipped to a three-year low.
The slide occurred after the U.S. Fed signalled on Wednesday there was no rush to reverse low interest rates.
The knee-jerk reaction may not last, however, if there are no signs of another round of quantitative easing while some countries ratchet up interest rates, Corrigan added.
Gold price record, silver price, aluminium price, investors commodities, U.S. Federal Reserve
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