Gold price jumps to near 3-week high



REUTERS

Published — Friday 12 July 2013

Last update 17 July 2013 3:45 am

| نسخة PDF Print News | A A

LONDON: Gold jumped to a near three-week high as the dollar tumbled after the US Federal Reserve signaled it would continue to pursue monetary stimulus, given tame inflation and a fragile labor market.
Fed Chairman Ben Bernanke said on Wednesday that a highly accommodative policy was needed for the foreseeable future, surprising investors after his comments on June 19 that the economy was expanding strongly enough for the Fed to end the stimulus measures by mid-2014.
The tapering would support a rise in interest rates and bolster the dollar, making gold less attractive.
“I think that a degree of caution by the Fed is now likely to replace the rather optimistic picture that was implied in May and June, as the economic recovery is not quite clear cut as previously thought,” Mitsubishi analyst Jonathan Butler said.
Spot gold climbed as much as 2.7 percent to $ 1,298.36, its highest since June 24. It was up 1.7 percent to $ 1,285.16 an ounce by 1407 GMT.
Comex gold jumped as much as 4 percent to a two- and-a-half week high of $ 1,297.20 an ounce. It was trading at $ 1,284.50, still up $ 37.20.
This strength marks bullion’s fourth day of gains in its longest winning streak since mid-April. Weekly gains of around 5 percent were also boosted by good physical demand from China.
Gold is still down 23 percent this year after taking a beating following Bernanke’s comments in May and June that the Fed could begin scaling down its bond purchases later this year.
But comments from the central banker at a conference on Wednesday suggested that stimulus could last longer, pressuring the dollar and making commodities priced in the greenback cheaper for holders of other currencies.
Copper jumped about 3 percent to near one-month highs, while US crude hit multi-month highs.
“Commodities will likely push higher going into next week, as the pendulum has clearly swung from a scenario where most participants were expecting the Fed to start paring back stimulus in September to one where there is growing uncertainty that this indeed will happen anytime soon,” INTL FCStone analyst Ed Meir said.
The dollar extended losses after US data showed the number of Americans filing new claims for unemployment benefits rose last week.
Traders said prices could target a break through technical resistance at $ 1,300.
“I suspect a test of $ 1,300 will be on the cards, considering order books are very light up to that point ... I am looking to fade a rally into $1,300-$1,310, with a stop in at $1,315 and a take profit at $ 1,285,” MKS Capital senior trader Alex Thorndike said.
However, investor sentiment remained guarded. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust GLD, fell 0.1 percent to 30.192 million ounces on Wednesday, hitting fresh lows since February 2009.
Gold’s strength also pushed silver to a three-week high of $20.26 an ounce earlier — at 1408 GMT the metal was up 3.83 percent at $ 20.07.
Platinum and palladium were close to earlier three-week highs of $ 1,409.50 an ounce and $ 728.50 an ounce, respectively.

What's happening around Saudi Arabia

RIYADH: Foreign Minister Adel Al-Jubeir has denounced “aggressive statements” by Iran, after Tehran accused Bahrain of stoking Gulf tensions by making unfounded allegations against it.“This is unacceptable to us,” the minister said at a joint news co...
DAMMAM: A wanted terrorist was killed during a gunfight in the town of Al-Qudayh in the Eastern Province on Sunday, police said.Qatif police received a report that a Saudi man suffered gunshots and was taken to Modhar Dispensary in Al-Qudayh by his b...
JEDDAH: The Saudi security forces have thwarted nearly 18,000 infiltration attempts on the Kingdom’s border with Yemen since the launch of Operation Decisive Storm in March. “The number of infiltration attempts foiled by the security authorities sinc...
ABHA: Several Saudi businesswomen started traveling with a group of friends after recent regulations which allow women to travel without their mahram. These women said they find great fun to travel as a group with their friends and their children, wh...
RIYADH: The United Nations, Arab League and Gulf Cooperation Council welcomed the Kingdom-led coalition’s announcement of a five-day cease-fire, that took effect at midnight on Sunday, to push humanitarian relief in war-ravaged Yemen to the beleaguer...
ALKHOBAR: Jobless Saudi women constitute 70 percent of the unemployed. The Ministry of Economy and Planning said 58 percent of the jobless have preparatory school level education. According to the statistics, the annual unemployment growth rate among...
RIYADH: Saudi Arabia has found traces of a civilization that was domesticating horses about 9,000 years ago, 4,000 years earlier than previously thought. The discovery has shed new light on the origin of the Arabian horse, which has remained a great...
RIYADH: The Ministry of Labor in the Makkah region found 250 laborers working on various construction projects during restricted hours of the day. Punitive measures will be taken against the employers of these workers. According to a ministerial decr...
JEDDAH: When poverty is your guest for 15 years, gardens, parks, streets and pavements become your abode under the unavoidable scorching sun. One has to face hardships of hunger and survive on breadcrumbs. This is the situation of a 60-year-old Saudi...
JEDDAH: The negative attitudes of society in dealing with harassment and abuse cases prevent victims from reporting a great number of such cases to the authorities.Despite this, about 3,982 cases reached the country's criminal courts in 1435 and 1436...
AL-QATIF: The Omani security forces have arrested a man who, they said, accidentally fired a bullet that hit a young Saudi girl in a hotel in Musandam on Saturday. Four-year-old Zainab bint Mohammed Labad of Al-Awamiyah was playing in the hotel lobby...
Ramon Corvera, deputy chief of mission at the Argentinian Embassy in Riyadh.* Which particular aspect of Saudi Arabia you like the most? The natural beauty of the desert.* What is your favorite and oft-repeated Arabic word? Masha’Allah.* Which book i...
JEDDAH: The creativity and entrepreneurship community program of Umm Al-Qura University brought together 80 creative entrepreneurs to exchange their experiences and knowledge on Monday. Fawaz Saad, the dean of the institute for innovation and entrepr...
RIYADH: The August issue of ‘Nature’, the monthly magazine of King Abdulaziz City for Science and Technology (KACST), will focus on Middle East Respiratory Syndrome (MERS) corona, which has affected 1,055 people in the Kingdom since June 2012.The to...
LILLE, France: Saudi Arabia’s firm stand against the phenomenon of violence as well as religious, ethnic and cultural fanaticism came in for praise at an international symposium, which concluded here.The participants of the symposium on "Media Covera...

Stay Connected

Facebook