By Kitco News
The gold market may have unlimited potential as bad news has been unable to drag prices lower, according to some analysts.
The yellow metal is preparing to end Friday in positive territory, ending a two-week losing streak, with prices trading at their highest level since July 12. December Comex gold futures last traded at $1,357.60 an ounce up 2.6% on the week.
At the same time September Comex silver future last traded at $20.350 an ounce, up 4.4% on the week.
The gains come following two major central bank monetary policy decision. Wednesday, gold rallied to session highs despite the Federal Reserve striking an optimistic tone in its monetary policy statement. The committee noted, “Near-term risks to the economic outlook have diminished.”
Friday, gold prices hit a two-week high after the Bank of Japan introduced less-than-expected stimulus measures. The central bank announced that it would nearly double its purchases of exchange traded funds to an annual pace of about ¥6 trillion yen from around ¥3.3 trillion yen, increasing its exposure to equity market risks. However, many market participants were expecting much more aggressive action, including the introduction of helicopter money, where the central bank would give money directly to Japanese consumers.
“This was the lowest hanging fruit for the central bank, and there was broad agreement that this step would be taken,” said currency strategist at Brown Brothers Harriman.