February 10, 2011 (Newswire.com) - Gold futures hiked on Wednesday lifted by a weak dollar and concerns over inflation.
Market traders noted that a continued rally in the world's grain prices has brought inflationary concerns to the forefront which has prompted many investors to add gold to their portfolios as a hedge against inflation.
Senior analyst Greg Kelly sees this as nothing new. "Gold as a hedge against inflation is one of the primary drivers of gold prices. As I noted 2 weeks ago, the stage was set for a February gold run, and I still think that gold will likely break $1400 before the end of the month."
In addition to inflationary concerns, the weak dollar gives another strong push to the gold market. Wednesday the dollar fell further against major U.S. trade partner currencies, and according to Fed Chairman Bernanke, the unemployment rate in the U.S. is likely to remain high for quite some time.
Gold prices had fallen since the beginning of 2011, but recently rallied and hit a 2 week high on Tuesday.
Meanwhile news that JPMorgan Chase (NYSE: JPM) will now accept gold as collateral on certain trades has added to the buzz. This was amplified when a leading London clearinghouse, LCH Clearnet, announced that it was considering accepting gold as well.
"Gold continues to look good. And as a producer we are very excited about the upward trend that we are experiencing. Based on what we are seeing in February, we expect gold to average at or above its current trading range for 2011." - Kelly