BLBG:Gold Is Seen Advancing On Speculation About More Easing
Gold was seen gaining in New York on speculation central banks will signal further steps to support growth.
The Federal Open Market Committee ends a two-day meeting today, while European Central Bank officials convene tomorrow. Italian Prime Minister Mario Monti and French President Francois Hollande said yesterday the two countries are “determined” to do everything to protect the euro zone’s integrity. Gold reached a five-week high of $1,633.30 an ounce on July 27 after ECB President Mario Draghi said he would work to preserve the euro.
“Precious-metals markets are waiting for comments from the ECB and FOMC, to see if any guidance of more decisive action and, ultimately, balance-sheet expansion is given,” Nick Moore, head of commodity research at Royal Bank of Scotland Group Plc in London, said today in a report. “QE3 remains a possibility further ahead,” he said, referring to more quantitative easing.
Gold for December delivery rose 0.1 percent to $1,616.40 an ounce by 7:50 a.m. on the Comex in New York. Prices gained for a second month in July, increasing 0.6 percent. Bullion for immediate delivery was little changed at $1,613.45 in London.
Bullion holdings in exchange-traded products expanded 4.8 metric tons to 2,395.4 tons yesterday, data compiled by Bloomberg show. U.S. Mint sales of American Eagle gold coins dropped 49 percent to 30,500 ounces in July, the lowest amount since April, data on the mint’s website showed.
While the Fed refrained from introducing a third round of asset purchases at its June meeting, Chairman Ben S. Bernanke indicated it’s an option. Gold rose about 70 percent as the central bank bought $2.3 trillion of debt in two rounds of quantitative easing that ended in June 2011.
Silver for September delivery fell 0.2 percent to $27.865 an ounce. Palladium for September delivery fell 0.2 percent to $589.55 an ounce. Platinum for October delivery was 0.6 percent lower at $1,409.10 an ounce.
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net
