Daily Gold Update

Source: MarketWatch

New York— Gold futures rallied more than 8% Thursday to end near $960 an ounce, as the Federal Reserve's plans to purchase as much as $1.15 trillion in U.S. bonds and mortgage-backed securities sparked worries of inflation ahead, raising gold's appeal as a hedge against rising prices. "Looking ahead, we fear inflation. It may be that Dr. Bernankenstein has created a monster beyond his control," said Michael Farr, president of Farr, Miller & Washington, referring to Fed Chairman Ben Bernanke. The U.S. dollar's losses in the wake of the Fed's move also lifted gold prices, with a weaker greenback raising gold's investment appeal. Gold for April delivery surged $68.70, or 7.8%, to end at $958.80 an ounce on the Comex division of the New York Mercantile Exchange. It climbed to $963.5 earlier in the session, the highest level in nearly one month.

Gold's gain came after it lost $27.70 to end at $889.10 Wednesday, the lowest closing level in two months. Wednesday's floor trading ended before the Fed announcement. George Gero, a precious metals trader for RBC Capital Markets, called gold's quick reverse from down nearly $30 dollars to up more than $60 "shock and awe." The Fed's plan "could change [the] inflation outlook and result in a greater trading range," he said. See full story.