Forexpros - Gold futures rose sharply on Friday, trimming a
weekly loss, as Federal Reserve Chairman Ben Bernanke said the
central bank remained prepared to implement fresh measures to
stimulate the faltering U.S. economy.
On the Comex division of the New York Mercantile Exchange, gold
futures for October delivery settled at USD1,827.65 a troy ounce by
close of trade on Friday, slumping 1.72% over the week, the first
weekly loss since late June.
Gold futures surged 3.2% on Friday after Fed Chief Bernanke said,
"The Fed has a range of tools that could be used to provide
additional monetary stimulus", but stopped short of outlining when
and if this may happen.
In a highly-anticipated speech at the central bank's annual retreat
in Jackson Hole, Wyoming, Bernanke said, "The Committee will
continue to assess the economic outlook in light of incoming
information and is prepared to employ its tools as appropriate to
promote a stronger economic recovery."
Bernanke announced that the central bank's September policy-setting
meeting would run for two days instead of one, in order to "allow a
fuller discussion" of the economic outlook.
Global financial service provider Deutsche Bank noted in a report
late Friday that while the Fed was "not prepared to act at this
point, it kept a bias to ease in place."
Adding to worries about the outlook for U.S. growth, a government
report showed the U.S. economy grew 1% in the second quarter,
disappointing expectations for an expansion of 1.1% and slower than
an initial estimate of 1.3%.
Gold prices rallied to an all-time high of USD1,917.90 a troy ounce
on Tuesday, before dropping sharply after the CME Group raised
margins on gold contracts for the second time in less than a month
The CME Group, operator of the Comex increased the so-called
initial margin by 27% to USD9,450 per 100-ounce contract from
USD7,425, pushing small investors out of the gold market as it
raises the cost to trade a futures contract.
Also last week, the Bombay Bullion Association, an industry group
said on Tuesday that gold imports by India could reach a record
high of 1000 metric tons this year, as investors seek a haven
against inflation and volatility in stock markets. India is the
world's largest gold consumer.
Elsewhere on the Comex, silver for September delivery traded at
USD41.36 a troy ounce by close of trade on Friday, tumbling 4.85%
on the week, while copper for September delivery traded at USD4.101
a pound, jumping 3.3% on the week.