Gold Gains in London on Speculation About More Monetary Easing
Gold gained for a second day in London on speculation the Federal Reserve will do more to support growth.
Fed Chairman Ben S. Bernanke speaks on economic measurement in Cambridge, Massachusetts today. Labor Department data on Aug. 3 showed U.S. payrolls rose 163,000 in July, the most since February and exceeding the 100,000 gain estimated by economists surveyed by Bloomberg News. Still, the unemployment rate rose to 8.3 percent from 8.2 percent in June.
“New job additions surprisingly rose much more than what the markets had anticipated, but the unemployment rate too unexpectedly rose,” analysts at Mumbai, India-based AnandRathi Commodities Ltd. said today in a report. “The latter kept the door open for QE3,” they said, referring to quantitative easing.
Immediate-delivery bullion rose 0.3 percent to $1,608.93 an ounce by 11:10 a.m. in London. Prices dropped 1.2 percent last week, the most since June 22. December-delivery futures were 0.1 percent higher at $1,611.40 on the Comex in New York.
Gold at the morning “fixing,” used by some mining companies to sell output, increased to $1,606.75 an ounce in London from $1,602 in the afternoon on Aug. 3.
Hedge funds and other money managers increased their bets on higher gold prices by 35 percent in the week ended July 31, U.S Commodity Futures Trading Commission data show. Holdings in exchange-traded products expanded for a fourth day on Aug. 3, climbing 3.6 metric tons to 2,400.8 tons, data compiled by Bloomberg show.
The Fed said on Aug. 1 that it “will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.” Gold rose about 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing that ended in June 2011.
Silver for immediate delivery was little changed at $27.7775 an ounce. Palladium declined 0.7 percent to $576.63 an ounce. Platinum was 0.5 percent lower at $1,399.13 an ounce.
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