Gold approached the 11-month high

Last week, gold hit a 10-month high on speculation that the incentive program in the U.S., Europe and Japan will increase the appeal of the precious metal as an alternative to currencies.
Last month, gold price rose by 5.1%, after the Federal Reserve announced the launch of a third round of quantitative easing. In addition, the European Central Bank, which has pledged to buy bonds of troubled countries, and the Bank of Japan to expand the fund asset purchases, also had a positive impact on the growth of gold.
The price of gold rose in the week against the outcome of the Bank of England and the ECB. On Thursday, the Bank of England did not extend the incentive program, fearing inflation, and left the rate unchanged at 0.5%, and the size of the program QE - at 275 billion pounds. In turn, the ECB kept rates unchanged at 0.75%. Central Bank head Mario Draghi during a press conference, explained the motives of the decision. According to him, during the 2012 inflation will be kept above 2% and only in 2013 it is expected to fall below this mark. Consequently, the jump in inflationary pressures will be characterized as temporary. Draghi also said that the rate of economic growth are weak, and the recovery is very slow, because the mood of the players negatively affected by problems of financial markets. Draghi comments strengthened the euro and weakened the dollar, which, in turn, led to a rise in gold prices.
In India - the world's largest consumer of gold - an increased demand in the physical market by strengthening rupee, which caused lower domestic prices to a minimum of five weeks. Stocks of gold-ETFs on Thursday rose by 418,611 ounces, and the stocks of the largest ETF SPDR Gold Trust rose to a record level 1.333,44 tons.