[/caption]Update 5:15 pm EST: The closing price for gold today was $1,357.36. With this gold is up $15.26 or 1.14% for the day.
Update 2:21 pm EST: The price for gold is now at $1,357.27 per ounce. That is 1.13% or $15.08 more than the opening price today. That means, at least for the last 1 1/2 hour, gold is trading in this high range. We might see some profit taking before the end of the day.
The highest gold price close so far was $1,376.70 on October 14.
Update 1:38 pm EST: The price for gold is now at $1,357.12 per ounce. That is 1.12% or $15.02 more than the opening price today.
[caption id="attachment_11048" align="alignright" width="187" caption="Gold Price as of 1:38 pm EST, picture courtesy of goldprice.org"]
[/caption]In early morning trading in New York the gold price jumped to $1,349.92 an ounce, but subsequently went back to $1,345 an ounce. It is too early to establish a trend.
[caption id="attachment_11025" align="alignright" width="191" caption="Gold Price as of 9:00 am EST, picture courtesy of goldprice.org"]
[/caption]The Federal Reserve meeting is seen as an important factor for the gold prices. The Fed's alleged plans for monetary easing could prompt money to flow into gold.
Monetary easing is a nice word for creating money out of nothing. The economy is manipulated long enough that everybody agrees that it is best to print some more money. Actually in this case it is not printed, the Fed just credits its own account with money that was not there before. The Fed then uses the new found riches to buy government bonds and mortgage backed securities.
But Swiss bank UBS said, based on a report from earlier today by Matthew Walls from WSJ:
"Gold prices already reflect expectations of a smaller quantitative easing program than they did a week ago, although there is a risk that gold could be further sold off next week."
"Should [quantitative easing] disappoint heavily, and risk assets be sold, gold will also tumble," UBS said in a report Friday. "We still believe that a brief look towards $1,300 an ounce is likely, but short-lived."
The gold prices are already reflecting all known data. The U.S. Fed is not the only factor that influences gold. The prices above are for spot gold, not for gold coins. Gold bullion coins are usually bought and sold for prices close to the spot price for gold, while numismatic or rare coins are somewhat independent from these gold prices.
The gross domestic product (GDP) or gross domestic income (GDI) is a measure of a country's overall economic output. It is the market value of all final goods and services made within the borders of a country in a year. It is often positively correlated with the standard of living, alternative measures to GDP for that purpose.
The GDP is closely related to monetary policy. Printing money will increase the GDP (on paper). Also, the GPD is used by the Fed as a measure whether or not it is necessary (or possible) to play around with the money supply.
The LA Times reports:
"GDP rises slightly to 2% in sign that economy remains sluggish".
This is in line with right in line with analysts' forecasts and expectations. That means that the consensus is that the Fed will be issuing more money to buy bonds.
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