Gold Rallies to a 16-Week High as Fed May Add Stimulus

Gold advanced to the highest level in 16 weeks after breaking above the 200-day moving average as the Federal Reserve signaled that it may add stimulus and investment holdings rose to a record. Platinum extended a rally.
Minutes from the Federal Open Market Committee’s July 31- Aug. 1 meeting showed that “many members” believed more monetary accommodation would be needed unless the recovery picks up. Assets in gold-backed exchange-traded products expanded to 2,442.26 metric tons, data tracked by Bloomberg showed. The 200- day average is an important technical level and the climb above it may have spurred more buying, Commerzbank AG said today.

“Investment demand is in the driver seat and the technicals are looking very positive,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “Gold is again in the investor focus now that we have potential trigger events coming up, which could indicate more global monetary stimulus.”
December-delivery bullion climbed 1.5 percent to $1,665 an ounce by 6:47 a.m. on the Comex in New York. Futures rallied to $1,669.50 earlier today, the most expensive since May 1. Gold rose 0.5 percent to $1,662.95 in London.
London-traded bullion closed at $1,654.65 yesterday, above the 200-day moving average for the first time since March, signaling more gains. Gold in New York closed below the 200-day moving average yesterday and traded above it today. The 200-day moving average is currently at $1,650.35.

‘Bull’ Mode

“The gold market now seems to be in bull mode and any friendly news is gratefully received,” David Govett, global head of precious metals at Marex Spectron Group Ltd., said in a report today. “It is election year and the pressure is on for a short-term fix, making the possibility ever more likely,” he wrote, referring to further so-called quantitative easing in the U.S.
Platinum for October delivery advanced as much as 2.4 percent to $1,563.60 an ounce, the highest level for a most active contract since May 3, before trading at $1,543.60. Prices are up for a sixth day, the best run since the period to Oct. 28, after violence in South Africa, the biggest supplier.
Worker discontent at Lonmin Plc (LMI)’s Marikana complex in South Africa that led to 44 deaths spread to Royal Bafokeng Platinum Ltd. (RBP), whose operations were disrupted by miners yesterday demanding higher wages. Anglo American Plc (AAL)’s platinum unit, the world’s largest producer, said workers made demands directly to the company on Aug. 17.
Silver for December delivery climbed 2.4 percent to $30.355 an ounce, after earlier reaching $30.625 an ounce, the highest level since May 3. Palladium for September delivery gained 0.6 percent to $632.60 an ounce.

Source: Bloomberg.

Reymount Investment Products & Services:

Online Forex Trading,

Online CFD Trading,

Precious Metals Trading,

Online Trading Software,

Introducing Brokers(IB),

Individual Trading,

White label Program.