Bernanke pledge drives gold gains
Gold gained for a second day, trading near its highest level in 10 months, after Federal Reserve chairman Ben Bernanke renewed a pledge for record stimulus which spurred last quarter’s rally.
Spot gold added as much as 0.3 per cent to $1781 an ounce before trading at $1778.25 in Singapore this morning. The metal climbed to $1791.45 yesterday, the most expensive since November last year. Silver was up 0.4 per cent to $34.79 an ounce after reaching $35.3563 yesterday, the highest since March.
Mr Bernanke defended the Fed’s unprecedented bond buying in his first comments since the central bank renewed the purchases last month, saying the program will spur growth, cut unemployment, help savers and support the dollar. Federal Reserve Bank of Chicago President Charles Evans said the bank can do more to boost growth and hiring. Gold gained 11 per cent in the third quarter, the most since June 2010, as the Fed announced a third round of monetary stimulus.
‘‘The bias is probably for upside movement in gold prices,’’ David Lennox, a resource analyst at Fat Prophets in Sydney, said today by phone. ‘‘The currency factor and the South Africa situation will also help.’’
The euro traded about 0.8 per cent from its lowest level in three weeks amid signs that the region’s economy is worsening, keeping pressure on policy makers to contain the debt crisis.
Strikes by mineworkers in South Africa showed no respite as a judicial inquiry into the deaths of 44 people at Lonmin Plc’s Marikana mine started yesterday. About 40 per cent of the country’s gold output remains closed. AngloGold Ashanti, the world’s third-biggest producer, said all its mines in South Africa have been shut by unofficial strikes, while Gold Fields’s Beatrix and KDC West operations have also been disrupted.
Bullion for delivery in December declined 0.2 per cent to $1780.10 an ounce. Spot platinum retreated 0.3 per cent to $1,675 an ounce and palladium fell 0.2 per cent to $644 an ounce.