Gold Rises to Two-Week High as Bernanke Backs Sustained StimulusDebarati Roy and Whitney McFerron
Gold futures rallied to a two-week high after Federal Reserve Chairman Ben S. Bernanke said yesterday that the U.S. needs “highly accommodative monetary policy for the foreseeable future.” Silver also gained.
Bullion slumped 23 percent last quarter as Bernanke said that the central bank may reduce its $85 billion of monthly asset purchases this year. Minutes of a Fed policy meeting released yesterday showed many officials wanted to see more signs of improving employment before backing a cut in bond buying. The number of Americans filing for unemployment benefits unexpectedly increased to a two-month high in the week ended July 6, Labor Department figures showed today.
“Gold got a boost after Bernanke gave the impression that tapering is currently a distant dream,” Carlos Perez-Santalla, a New York-based broker at Marex North America LLC, said in a telephone interview. “Today’s data further cements the fact that the economy has not completely recovered.”
Gold futures for August delivery climbed 2.6 percent to settle at $1,279.90 an ounce at 1:46 p.m. on the Comex in New York, the biggest jump for a most-active contract since July 1. Earlier, the precious metal touched $1,297.20, the highest since June 24, the last time the price topped $1,300.
Trading was 24 percent higher than the average of the past 100 days for that time of day, according to data compiled by Bloomberg.
“Sentiment will now be to the upside, and the market will be looking for an attempt on $1,300,” David Govett, head of precious metals at Marex Spectron Group in London, said today in a report.
Silver futures for delivery in September advanced 4.1 percent to $19.956 an ounce in New York, a fourth straight gain and the longest rally since March 8.
On the New York Mercantile Exchange, platinum futures for October delivery rose 2.9 percent to $1,407.60 an ounce, after touching $1,413.50, the highest since June 20. Palladium futures for September delivery gained 0.6 percent to $718.20 an ounce, after reaching $731.85, the highest since June 17.