Gold reached new record highs at US$1,387/oz today amid continuing weakness in the US dollar.
The American currency declined amid expectations of further quantitative easing (QE) by the Federal Reserve.
The minutes of the latest meeting of the Federal Open Market Committee showed that regulators were in favour of implementing further QE, citing the currently high unemployment rate of nearly 10% and low inflation as signs that the recovery is slowing.
Should the Fed decide to print more money and buy more fovernment debt, the American currency will likely decline further, while inflation will accellerate.
Gold is seen as an inflation hedge and an alternative investment to the US dollar and usually moves inversely to the US dollar.
Today, the EUR/USD rate rose to 1.407.
Gold stood at US$1,376/oz in late afternoon, while silver and platinum reached US$24.33/oz and US$1,704/oz respectively.
Major mining stocks were mixed. Gold producer African Barrick Gold (LON:ABG) slipped 7.5% after cutting its 2010 production guidance, while peer Randgold Resources (LON:RRS) lost 1%.
Silver miner Fresnillo (LON:FRES) added 2.2% and platinum producer Lonmin (LON:LMI) was unmoved.
Midcaps did better as gold miner Petropavlovsk (LON:POG) posted a small gain, Aquarius Platinum (LON:AQP) added 1% and silver producer Hochschild Mining (LON:HOC) advanced 2.3%.
Norseman Gold (LON:NGL), which operates Australia’s longest continuously running gold mining operation, and gold and copper focused investment holding company Mariana Resources (LON:MARL) were among the top performing small caps with gains of over 5%.