Gold rose as the outlook for more stimulus from the U.S. Federal Reserve spurred demand for the metal as a store of value.
The policy-setting Federal Open Market Committee will consider asset purchases at its Sept. 12-13 meeting, with unemployment stalled above 8 percent for 43 months. Chairman Ben S. Bernanke signaled last month that a third round of quantitative easing may be needed to reduce joblessness. Gold almost doubled from December 2008 to June 2011 as the Fed bought $2.3 trillion of debt in two previous rounds of QE.
“That’s where the focus is, especially for gold,” Marc Ground, a commodities strategist at Standard Bank Plc in Jonannesburg, said today by phone, referring to the Fed meeting. “The market is pricing in the order of $500 billion in outright easing, but I’m not sure the Fed would do something on that scale just yet. So we could see a pullback at the end of the week.”
December-delivery gold rose 0.1 percent to $1,734.10 an ounce by 7:05 a.m. on the Comex in New York. Gold for immediate delivery climbed 0.3 percent to $1,731.82 an ounce in London.
London-traded bullion rose to $1,745.40 on Sept. 7, the most expensive since Feb. 29, on speculation of additional stimulus. Assets in gold-backed exchange-traded products expanded to a record 2,480.4 metric tons yesterday, data compiled by Bloomberg show. Bullion’s so-called 14-day relative- strength index held today for a sixth day above the level of 70 that indicates to technical analysts that a drop in prices may be imminent.
Physical Demand
Physical demand remains “virtually non-existent” globally, UBS AG said today in a report. The bank’s volumes to India are down 22 percent so far this month from a year-earlier period, it said.Palladium for December delivery fell for the first day in seven, declining 0.6 percent to $668.80 an ounce. Platinum for October delivery was down 0.3 percent at $1,598.60 an ounce. Silver for December delivery was little-changed at $33.545 an ounce.
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