Gold soars following Obama's reelection

PRICES of gold surged yesterday following the reelection of Barack Obama as US president, and the market expects easier monetary policy to continue in the world's largest economy.

Gold prices surged 2.25 percent from Tuesday to end at 347 yuan (US$55.60) per gram on the Shanghai Gold Exchange yesterday ? the steepest gain in over five months.

International gold prices also rose by nearly 2 percent to US$1,729 an ounce, its strongest since October 23, after the US election results were known yesterday.

"Obama's victory helps gold as it means (US) quantitative easing is set to continue," Yuichi Ikemizu, a branch manager for Standard Bank in Tokyo, was quoted by Reuters as saying.

"Gold may be going back to US$1,800 this year. We are going to see higher gold prices in the coming days, weeks and months," Ikemizu said.

Gold rose to an 11-month high of more than US$1,795 an ounce in mid-October after the Federal Reserve unveiled in September a third round of quantitative easing.

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