Gold Prices Hit High as Fed Hints at QE3

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"Gold prices were catapulting to record highs on technical trading, safe haven buying and inflation worries."

The Street, Alix Steel

Gold prices were catapulting to record highs Wednesday, boosted by technical trading, safe haven buying and inflation worries.

Gold for August delivery was adding $17 to $1,579.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,581.40 and as low as $1,564.60 while the spot gold price was popping $10.60, according to Kitco's gold index.

Silver prices were following gold higher up $1.72 to $37.36 an ounce. TheU.S. dollar index was down 0.66% at $75.58 and the euro was climbing 0.70% vs. the dollar.

Gold and silver were popping Wednesday as investors piled into the safe haven metals after the Federal Reserve hinted at more quantitative easing. In the latest FOMC minutes released Tuesday, certain Fed policymakers expressed their willingness to consider QE3 if inflation dropped and unemployment stayed high.

More money in the system heightens the risk of long term inflation meaning the U.S. dollar would be worth less over time making gold and silver safer places to stash cash.

Gold and silver extended their rallied after Moody's slashed Ireland's debt rating to junk status putting it on par with Portugal and Greece. The rally pushed gold to an intra-day high of $1,581.40 an ounce after a record settle Tuesday.

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