Gold closed at a record high Tuesday, surpassing its previous high set in May, as some investors ran back to the classic haven amid global financial markets’ latest turmoil.
The metal also got a boost as the minutes of the Federal Reserve’s last meeting showed some policymakers were willing to push for a new monetary stimulus program if the economy failed to show significant job growth.
That could mean a resumption of the Fed’s bond-buying program, which critics say has helped fuel inflation, particularly in commodities. Fears of higher inflation often drive more investors to gold as a hedge.
The Fed is “thinking about more free money,” said Frank Lesh, a commodities analyst at FuturePath Trading in Chicago. “The first place it goes is into the markets.”
Gold jumped $13.10 to $1,561.90 an ounce in the regular futures trading session in New York. That topped the old closing high of $1,556.70 on May 2.
The metal’s price now is up 9.9% year to date — more than twice the price gain of the Standard & Poor’s 500 stock index — and is on track for its 11th straight annual increase.
Gold continued to rise in after-hours trading Tuesday, reaching $1,570 an ounce by about 1 p.m. PDT, following the release of the Fed meeting minutes and after Ireland’s debt rating was cut to junk status by Moody’s Investors Service.
Gold has risen for six straight sessions, powered in large part by the latest turn in Europe’s debt crisis. The “contagion” from Greece, Portugal and Ireland has spread to Italy and Spain over the last week, driving those countries’ bond yields up sharply, though they eased a bit Tuesday.
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