A $700 billion plan to bail out failing U.S. financial institutions has given Wall Street the jitters and sent gold prices in motion.
On Monday, Sept. 22, gold jumped $44 an ounce as investors looked to hard assets like precious metals. Gold settled at $909 an ounce as stock market decliners beat advancers four to one on the New York Stock Exchange.
That same day platinum rose $76 an ounce, the highest one-day increase in almost two years, to $1,212.75 an ounce. But it’s still a far cry from its record $2,301.50 set last March. Silver settled at $12.98.
The next day, Sept. 23, gold jumped $10 a troy ounce and silver was up $1.40.
“Gold prices are heading much much higher in the coming months in our humble opinion,” reported Bob Kirtley of Gold-Prices.biz.
Ned W. Schmidt, publisher of The Value View Gold Report, predicted that gold may well benefit from the government financial bailout plan.
“With Federal Reserve now forced to monetize vast quantities of U.S. government debt, Federal Reserve credit will grow rapidly,” he wrote on Sept. 22. “As that is base from which money is created, quantity of dollars will grow. As quantity of dollars rises, the value or price of those dollars will decline. As that happens, the dollar value of gold will rise. The U.S. financial bailout plan in essence puts a rising floor under the dollar price of gold.”