London 26/04/2012 - Gold edged higher in Thursday morning trading after comments
from US Federal Reserve chairman Ben Bernanke yesterday boosted the odds of a
third round of quantitative easing, although volumes remain thin.
Spot
gold was last at $1,648.10-1,648.90 per ounce, up $4.30 on yesterday's close of
$1,643.80. The metal has traded in a range of $12 so far today between $1,653.65
on the high and $1,641.70 on the low, continuing its recent phase of
consolidation but rebounding from Wednesday's low of
$1,623.90.
Yesterday, Bernanke said US monetary policy was heading in the
right direction although the central bank would consider more bond purchases if
needed.
“It is all very quiet today. The Fed was pretty uneventful
yesterday but once again the selloff was stopped in its tracks, so I think we
can look higher,” a London-based trader said.
Stimulus from the Fed is
seen as unequivocally bullish for gold prices because extra liquidity tends to
debase the dollar and create future inflationary risks. It has already pumped
around $2.3 trillion into the economy in two phase of quantitative easing
(QE).
Many participants believe that a third round of QE will happen
eventually, which has strengthened demand for gold as a hedge against
inflation.
“More bullish growth was suggested and Bernanke expressed
concerns that any extra stimulus could be 'reckless', inciting diminishing
marginal returns,” another London-based trader said.
Still, trading is
thin, with very little investor interest, market observers agreed.
“We
aren’t seeing much genuine business out there,” the first trader said.
In
India, hopes that the Akshaya Tritiya festival, considered an auspicious time to
buy gold, would boost sales have been dashed, with business down as much as 30
percent on last year. The drop has been attributed to high prices, with the
rupee soft against the dollar.
Prices hit an all-time high of 91,369.31
rupees per ounce in December last year and were around a still-strong 86,900
rupees today.
The US jobs market will be back in the limelight today with
the release of jobless claims figures. Also due for release are US pending homes
sales, UK CBI realized sales and German preliminary CPI data. ECB president
Mario Draghi is also scheduled to speak.
Among other precious metals,
Silver gained 60 cents to $30.76-30.79 per ounce. Palladium rose $3.12 to
$661.25-667.25, while platinum gained $2.32 to $1,554.82-1,564.82.
from US Federal Reserve chairman Ben Bernanke yesterday boosted the odds of a
third round of quantitative easing, although volumes remain thin.
Spot
gold was last at $1,648.10-1,648.90 per ounce, up $4.30 on yesterday's close of
$1,643.80. The metal has traded in a range of $12 so far today between $1,653.65
on the high and $1,641.70 on the low, continuing its recent phase of
consolidation but rebounding from Wednesday's low of
$1,623.90.
Yesterday, Bernanke said US monetary policy was heading in the
right direction although the central bank would consider more bond purchases if
needed.
“It is all very quiet today. The Fed was pretty uneventful
yesterday but once again the selloff was stopped in its tracks, so I think we
can look higher,” a London-based trader said.
Stimulus from the Fed is
seen as unequivocally bullish for gold prices because extra liquidity tends to
debase the dollar and create future inflationary risks. It has already pumped
around $2.3 trillion into the economy in two phase of quantitative easing
(QE).
Many participants believe that a third round of QE will happen
eventually, which has strengthened demand for gold as a hedge against
inflation.
“More bullish growth was suggested and Bernanke expressed
concerns that any extra stimulus could be 'reckless', inciting diminishing
marginal returns,” another London-based trader said.
Still, trading is
thin, with very little investor interest, market observers agreed.
“We
aren’t seeing much genuine business out there,” the first trader said.
In
India, hopes that the Akshaya Tritiya festival, considered an auspicious time to
buy gold, would boost sales have been dashed, with business down as much as 30
percent on last year. The drop has been attributed to high prices, with the
rupee soft against the dollar.
Prices hit an all-time high of 91,369.31
rupees per ounce in December last year and were around a still-strong 86,900
rupees today.
The US jobs market will be back in the limelight today with
the release of jobless claims figures. Also due for release are US pending homes
sales, UK CBI realized sales and German preliminary CPI data. ECB president
Mario Draghi is also scheduled to speak.
Among other precious metals,
Silver gained 60 cents to $30.76-30.79 per ounce. Palladium rose $3.12 to
$661.25-667.25, while platinum gained $2.32 to $1,554.82-1,564.82.
