Gold's virtue, says Mr Grant, is that it is a monetary metal, because of its scarcity and, of course, its history.

ECONOMIST: Buttonwood

As the tectonic plates of monetary policy shift, the yellow metal is set to continue its climb.

FORBES: Bernanke And Draghi Add Fuel To Gold's Fire, Even Miners Rally

Among the most sensitive asset classes to monetary easing is gold, the yellow metal that trades inversely with the U.S. dollar and is seen by many as an inflation-hedge.

FORBES: Bernanke And Draghi Add Fuel To Gold's Fire, Even Miners Rally

This leaves only monetary policy, which has had the pedal to the metal for almost 2 years in terms of short-term interest rates.

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Headline risk aside, gold-market watchers said the underlying fundamentals for the metal remain supportive given the ultra-loose monetary policy by the Federal Reserve and other Western central banks and continued strong demand for physical gold from Asian nations.

FORBES: METALS OUTLOOK: Higher Prices Expected Next Week, But Outcome Hinges On Eurogroup Meeting

The metal hit a multi-month high at the start of the week as expectations built for more monetary accommodation following minutes of the July 31-Aug. 1 meeting of the Federal Open Market Committee that were construed as dovish.

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