Gold Heads for Best Week Since April as Fed May Keep Stimulus
Bloomberg, (31/5) -- Gold traded near a two-week high, heading for the
best week in a month, on speculation that the U.S. Federal Reserve will
maintain record stimulus to bolster growth. Palladium was set for the
best month since November.
Bullion for immediate delivery traded little changed at $1,414.95 an ounce at 8:25 a.m. in Singapore after rising as much as 0.2 percent to $1,417.25. Prices reached $1,418.25 yesterday, the highest level since May 15, and are up 2 percent this week to pare a monthly loss. Gold for August delivery advanced 0.2 percent to $1,415.10 an ounce on the Comex.
Gold has dropped 16 percent this year as equities rallied and the dollar strengthened amid concern that the Fed may slow the pace of stimulus. Data yesterday showed that the U.S. economy grew at an annualized 2.4 percent pace in the first quarter, down from a preliminary reading of 2.5 percent, while jobless claims increased. Holdings in the SPDR Gold Trust held level after climbing yesterday for the first time in since May 9.
“It tends to suggest that the broader U.S. economy is still quite weak,” said David Lennox, a resource analyst at Fat Prophets in Sydney, referring to the economic data. “It leaves the door open for quantitative easing to remain in place.”
Fed Chairman Ben S. Bernanke said last week that the central bank may slow its $85 billion of monthly debt purchases if the economy shows sustained signs of improvement. Bullion rose 70 percent as the Fed bought $2.3 trillion of debt in two initial rounds of quantitative easing through June 2011.
Bullion for immediate delivery traded little changed at $1,414.95 an ounce at 8:25 a.m. in Singapore after rising as much as 0.2 percent to $1,417.25. Prices reached $1,418.25 yesterday, the highest level since May 15, and are up 2 percent this week to pare a monthly loss. Gold for August delivery advanced 0.2 percent to $1,415.10 an ounce on the Comex.
Gold has dropped 16 percent this year as equities rallied and the dollar strengthened amid concern that the Fed may slow the pace of stimulus. Data yesterday showed that the U.S. economy grew at an annualized 2.4 percent pace in the first quarter, down from a preliminary reading of 2.5 percent, while jobless claims increased. Holdings in the SPDR Gold Trust held level after climbing yesterday for the first time in since May 9.
“It tends to suggest that the broader U.S. economy is still quite weak,” said David Lennox, a resource analyst at Fat Prophets in Sydney, referring to the economic data. “It leaves the door open for quantitative easing to remain in place.”
Fed Chairman Ben S. Bernanke said last week that the central bank may slow its $85 billion of monthly debt purchases if the economy shows sustained signs of improvement. Bullion rose 70 percent as the Fed bought $2.3 trillion of debt in two initial rounds of quantitative easing through June 2011.
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