Monday Open: $1,762.50
Weekly High: $1,786.70
Weekly Low: $1,755.30
Friday Close: $1,773.00

Coming off of last week’s immense gains, gold showed considerable strength this week, staying in the $1,750 – $1,780 range and then jumping to its highest peak of 2012 on Friday. Last Thursday gold reached the highest price of the previous in six months after the Fed announced further monetary easing in order to curb unemployment, and this week, it was upon speculation that Spain, a country already unstable financially, might reach out to take on monetary assistance from other European countries that caused the subsequent rally.

Amidst the global financial crisis, gold performs excellently because it is seen as a hedge fund against inflation and weak paper currency. Even though last year saw gold reach an unprecedented $1,900 per ounce (compared to $300 per ounce in 2003), speculators who expect to see gold surpass this benchmark this year are not uncommon. Especially after a slow summer and the recent upward trend for the precious metal, talk abounds of gold soon hitting $1,800, then $2,000, then eventually $2,400.

Analysts at Merrill Lynch wrote in a report that they expect to see gold reach $2,400 by the end of 2014. They also don’t expect to see gold dip below $1,500. “Given the new open-ended nature of QE3, the upward pressure on gold prices should continue until employment is strong enough to require a change in policy. In our view, this is unlikely to happen until the end of 2014,” the report said.

This is the Federal Reserve’s third stimulus program since the 2008 financial crisis, and consists of the government buying around $40 million of mortgage-backed debt each month to reduce consumer debt and boost the economy. Especially in conjunction with “Operation Twist,” which consists of the Fed buying a lot of short-term loans in order to cut down on long-term debt, this is a much more aggressive series of policy than most anticipated, which translates into good tidings for gold.

To sum up this week, Monday prices fell largely due to profit-taking, according to most sources. Profit-taking pressure and continued through Tuesday. On Wednesday, gold jumped slightly off of news that Japan was going to be enacting some new stimulus measures, including 10 trillion yen, or the equivalent of $128 billion, to buying asset funds. The U.S. dollar index was also weaker on Wednesday. Keep in mind, this is in addition to the European Central Bank’s announcement earlier this month that they’d be buying troubled E.U. bonds. Then on Friday, speculation that Spain would be undergoing further borrowing prompted one last move upward for the week.