Gold Advances on Outlook for Further Stimulus From Fed
Gold rose for the third time in four sessions as prospects for more U.S. stimulus from the Federal Reserve spurred demand for the metal as a store of value.
The policy-setting Federal Open Market Committee may consider asset purchases at its two-day meeting staring tomorrow. Chairman Ben S. Bernanke signaled last month that a third round of so-called quantitative easing may be needed to reduce joblessness. Germany’s Federal Constitutional Court in Karlsruhe will decide tomorrow whether to halt the country’s participation in the 500 billion-euro ($640 billion) European Stability Mechanism, the euro area’s permanent bailout fund.
“More and more people are gravitating toward the metal in anticipation of events over the next 48 hours,” Adam Klopfenstein, the senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The market is already pricing in a QE3, and uncertainty over the European vote is helping gold.”
Gold futures for December delivery added 0.2 percent to settle at $1,734.90 an ounce at 1:38 p.m. on the Comex in New York. Bullion touched a six-month high on Sept. 7 after U.S. job growth in August trailed estimates, adding to speculation that the Fed will announce more stimulus measures this week.
The metal surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing.
Assets in gold-backed exchange-traded products expanded to a record 2,480.43 metric tons yesterday, data compiled by Bloomberg show.
Silver futures for December delivery fell 0.2 percent to $33.566 an ounce in New York.
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