Gold Prices Rise on a Quiet Europe, US Inflation

May 18, 2012

Gold prices rose today as investors forsee the US Federal Reserve adding more stimulus to the markets to help drive the US economy. This triggers inflation fears, and gold is still seen as the best hedge against inflation.

Today’s rally is surprising following yesterday’s credit ratings downgrade of 16 Spanish banks and Greece’s credit rating cut as their political situation fails to improve.

Investors were refreshed to see traders once again turn to gold as a safehaven — this position has been in question in 2012.

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