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Gold pares gains but remains well-supported near record high

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Forexpros - Gold futures pared gains on Monday, easing off the all-time high as global equities rebounded and some profit-taking emerged, but the precious metal was expected to remain well-supported amid speculation the U.S. economy may require further stimulus.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,873.85 a troy ounce during U.S. morning trade, gaining 1.15%.

It earlier rose as much as 2.5% to trade at an all-time high of USD1,895.65 a troy ounce, eclipsing Friday's high of USD1,878.35 a troy ounce.

Global equities rebounded from last week's selloff, with European stock markets posting sharp gains, while U.S. equities were broadly higher after the open on Wall Street, denting the appeal of the precious metal.

Meanwhile, markets were looking ahead to the Federal Reserve's annual policy retreat in Jackson Hole, Wyoming later in the week, at which Fed Chief Ben Bernanke could announce additional measures to support the U.S. economy.

In its most recent statement on monetary policy released on August 9, the Fed indicated that it "discussed a range of policy tools available to promote a strong economic outlook recovery" and said it was prepared to employ the tools "as appropriate".

The statement fuelled speculation the central bank may embark on a third round of quantitative easing, after the second round of bond purchases concluded at the end of June.

Global financial service provider UBS warned in a report earlier that, "Should Bernanke put a damper on QE3 expectations, the yellow metal could well experience the correction that potential investors have been impatiently awaiting."

Also Monday, the Bombay Bullion Association, an industry group said 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 rose 1.05% to trade at USD43.38 a troy ounce, while copper for September delivery shed 0.42% to trade USD3.957 a pound.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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