BLBG:Gold Extends Advance on Optimism Fed Will Spur Growth
Gold advanced for a third day after Federal Reserve Chairman Ben S. Bernanke said he’ll do more to boost economic growth if necessary, weakening the dollar and boosting the appeal of bullion as a store of value.
Bernanke said the central bank is ready to add to its stimulus if needed even after it left its policy unchanged yesterday and upgraded its view of the economy for this year. Additional bond-buying is still “very much on the table,” he said. That helped stoke a rally in global stocks and drove the greenback lower. The Fed bought $2.3 trillion of debt in two rounds of so-called quantitative easing from 2008 to June 2011.
“Gold is clearly trading on the dollar,” Copenhagen-based Arne Lohmann Rasmussen, the head of rates, foreign-exchange and commodity strategy at Danske Bank A/S (DANSKE), said by e-mail today. “The dollar is under pressure. Hence, gold is higher despite the risk-on.”
Gold for immediate delivery gained 0.4 percent to $1,649.48 an ounce by 10:04 a.m. in London. June-delivery bullion gained 0.5 percent to $1,650.20 on the Comex in New York.
“Gold regained its footing after Bernanke said the Fed is prepared to do more for the U.S. economy,” said Lynette Tan, an investment analyst at Phillip Futures Ltd.
The metal rebounded after dropping as much as 1 percent yesterday, as the dollar held a third day of losses against a six-currency basket including the euro. Holdings in exchange- traded products backed by gold fell for a third day to 2,389.755 metric tons, the least since March 23.
Cash platinum, this year’s best-performing precious metal, gained 0.4 percent to $1,560.25 an ounce, rebounding from its drop to a three-month low yesterday. Spot silver advanced 0.4 percent to $30.8175 an ounce. Palladium rose for the first time in four days, gaining 0.4 percent to $665 an ounce.
To contact the reporters on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net
