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Zimbabwe - Monthly Economic Review - October 2012
During the month of September, gold prices continued on an upward trend surpassing the US$1,700 per ounce price. The last two weeks of the month saw the price of gold stabilizing to close the month at US$1,779 per ounce (Table 1). The rally in the price of gold was mainly driven by market expectations following the United States Federal Reserve announcement of a third round of quantitative easing in an effort to stimulate growth on 13 September. The Federal Reserve also indicated that it would introduce additional monetary steps if the U.S economy does not show clear progress in the short-term and pledged to keep rates low until mid-2015. The other factors contributing to the upward trend in gold prices in September, included: the growth in demand for gold in India coupled with the appreciation of the Rupee; the decision by the Bank of Japan to expand its stimulus plan by 10 trillion yen; expectations from China to issue additional easing steps to help jump-start its economy; and, expectations of the market from European Central Bank to introduce a bond purchase program targeting Spanish bonds.