NEW YORK (TheStreet) -- Gold prices were planted in positive territory Monday morning as Federal Reserve chairman Ben Bernanke said that the Fed would consider expanding its quantitative easing program.
In an interview with CBS' 60 Minutes over the weekend, Bernanke signaled that the central bank could expand its $600 billion bond purchase program to address the high unemployment rate.
Fueling inflation sentiment, this announcement, coupled with ongoing uncertainty about the Euro-zone's ability to contain its debt crisis, helped keep gold futures in positive territory. The rise was kept in check with a stronger dollar and stocks. According to the Associated Press, Bernanke said he hopes the Fed's bond buying will lower bond yields and encourage investment in stocks -- boosting business activity and economic growth in the country.
Gold for February delivery rose $6.30 to $1,412.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,420 and as low as $1,409.80 before the market open Monday.
The U.S. dollar index was rising 0.7% to $79.92 while the euro fell 1.2% to $1.33 versus the dollar. The spot gold price was lower by $1.60, according to Kitco's gold index.
"With Big Ben ... spouting that kind of stuff about the economy, and the possibility of more [quantatative easing], I'm surprised at the dollar buying this morning. I guess it's a bond buying thing, as yields on Treasuries have dropped from Friday morning's levels," EverBank World Markets President Chuck Butler wrote in a morning note.
According to AP, Bernanke said fears that the Fed would be printing more money and taking inflation risks through its bond purchases was a "myth." He said the Fed isn't printing money when buying Treasuries and the purchase won't result in a significant expansion of money circulating in the market, AP reported.
Gold prices approached new highs Friday, driven by a particularly disappointing November U.S. unemployment report. Investors fled for security through precious metals as the Labor Department reported that nonfarm jobs rose 39,000 as the private sector increased jobs by 50,000. The unemployment rate rose to 9.8%, the loftiest level since April. All the results were greatly below expectations.
