2012-11-07 16:16:10Roosevelt

Gold prices hit 1-week high on re-election of Barack Obama

Gold extended gains on Wednesday after Barack Obama was re-elected in the United States, paving the way for continued monetary stimulus in the world's largest economy.

The precious metal, typically seen as a hedge against inflation, in October rallied to an 11-month high above $1,795 an ounce after the US Federal Reserve announced a third round of aggressive economic stimulus in September.

Obama's victory will help gold as it means that quantitative easing will continue, said Yuichi Ikemizu, branch manager for Standard Bank in Tokyo.

"I think gold will be going back to $1,800 this year. We are going to see higher gold (prices) in the coming days, weeks and months," he added.

Gold reversed early losses to hit around $1,725 an ounce, its strongest since Nov. 1. It stood at $1,723.19 an ounce at 0600 GMT, up $7.85, but was still well below a lifetime high around $1,920 struck in September last year.

US gold for December added $8.80 an ounce to $1,723.80.