Daily Gold Update

Source: Bloomberg

New York— Gold prices rallied in New York, erasing an earlier drop, after the Federal Reserve said it would buy more U.S. government debt. The central bank said it would reinvest principal payments on its mortgage holdings into long-term Treasury securities in a bid to bolster growth. Gold prices have gained 27 percent in the past 12 months, reaching a record $1,266.50 an ounce on June 21, on speculation that record-low borrowing costs and government stimulus programs would spur inflation.

�If the Fed keeps printing money to buy more debt, it�s going to be positive for gold,� said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. �Gold is going to keep going higher. It�s an excellent investment.� Gold futures for December delivery traded at $1,207.60 an ounce as of 3:12 p.m. in electronic trading on the Comex in New York. See full story.