Gold prices jump on the back of a weak dollar

Gold prices jumped two per cent to a high of $1,319.70/t oz last night as the dollar fell against key currencies.

This comes as Federal Reserve chairman Ben Bernanke said the ending of quantitative easing did not have a set timetable. This kind of monetary stimulus is often thought of as a support for gold. Even so, Bernanke said last week that nobody (including him) understands how gold prices work.

But gold is still down over 30 per cent from its 2011 peak of $1,900, and miners are feeling the pinch. Today provided some relief, with Fresnillo trading above its 50-day moving average for the first time since 18 December 2012 and Randgold Resources also showing significant gains.

The spot gold price is now up 1.64 per cent to $1,317.28 per ounce, while silver is up 2.42 per cent to $19.93 on the Comex division of the New York Mercantile Exchange and the platinum spot price up 0.51 per cent to $1,437.25.