Central banks: The new gold bugs?
London (Nov 18) Gold's sudden increase in price took the markets by surprise Tuesday, and it could be policy plans by the world's central banks policy that are driving the precious metal ever higher.
Gold hit a two-week high of $1,193.95 on Tuesday, getting close to the key $1,200 per ounce level. This compares to just $1,131.85 on November 7, less than two weeks before.
The rise in the price of gold could be a "quiet signal of people revising expectations of outlook for US policy," Simon Derrick, head of the BNY Mellon markets strategy team, told CNBC.
In recent weeks, analysts and economists have started expecting the U.S. Federal Reserve to raise interest rates sooner. This has strengthened the dollar, and helped drive down gold. However, Tuesday's relative dollar weakness, coupled with the expected actions of other central banks, has helped send it up again.