Gold rallies to new record on Bernanke comments $897

Jan. 10, 2008: Gold futures rallied to a new all-time high Thursday, after the dollar fell sharply as investors interpreted Federal Reserve Chairman Ben Bernanke's prepared remarks as a sign that the central bank will further cut interest rates.
Jan. 10, 2008
Gold for February delivery soared as high as $897.30 an ounce on the New York Mercantile Exchange, a new record high that surpassed the previous record of $894.40 set on Wednesday.

In light of recent changes in the outlook for and the risks to growth, additional policy easing may be necessary," Bernanke said in a speech to a business group in Washington.
Bernanke added the central bankers "stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks."
The dollar fell sharply following Bernanke's comments. The dollar index, which tracks the performance of the greenback against a basket of major currencies, dropped 0.7% to 75.885. See Currencies.

"Bernanke's comments indicate the Fed had done nothing to dissuade the market from expecting a 50 basis-point rate cut later this month," said Marc Chandler, senior currency strategist at Brown Brothers Harriman & Co., in a note. "The dollar has been hit on the news, and the equity market has moved higher."


Mark O'Byrne, director at Gold and Silver Investments Ltd., said that "momentum remains with gold, and the $900 mark could be reached."
"The fact that many analysts and traders are now expecting a pullback could be a contrary indicator, and gold could rally to $900 prior to a correction," O'Byrne said in a note early Thursday.