Gold advanced to the highest in 16 months on speculation the Federal Reserve will cut benchmark interest rates today to insure against recession, hurting the dollar and fuelling demand for gold as an alternative investment. | |
| Gold has risen 7.2 per cent in London this month as a crisis in the US subprime mortgage market weakens the economy, pushing the dollar down 1.7 per cent to a record low versus the euro. The Bank of England yesterday said it will offer £4.4 billion ($8.77 billion) to shore up confidence in UK banks and mortgage lenders amid spreading turmoil in the world's credit markets. "The concerns driving a possible rate cut should prompt most large investors to go into gold as a safe haven and a hedge," Frederic Panizzutti, senior vice president at MKS Finance, said. |
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