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Gold posts strong gains as Bernanke says policy to stay loose

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Shutterstock photo - Gold prices shot up on Thursday after Federal Reserve Chairman Ben Bernanke said ultra-loose monetary policy, including the Fed's monthly USD85 billion asset-purchasing program, will stay in place for now.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were up 2.69% at USD1,280.95 a troy ounce in U.S. trading on Thursday, up from a session low of USD1,250.45 and down from a high of USD1,297.05 a troy ounce.

Gold futures were likely to find support at USD1,250.45 a troy ounce, the earlier low, and resistance at USD1,297.05, the earlier high.

Gold prices shot up after Fed Chairman Bernanke said Wednesday evening that the U.S. economy still requires highly accommodative monetary policies just hours after the release of the minutes from the Fed's June monetary policy meeting, which revealed other U.S. central bankers felt likewise.

Fed language sent the dollar plunging, as many investors were expecting more of a timeline as to when the Fed would begin tapering stimulus programs that weaken the dollar to keep interest rates low so the economy will pick up the pace of its recovery.

Gold and the dollar tend to trade inversely with one another, and monetary stimulus measures tend to make gold an attractive hedge.

Meanwhile, official data on Thursday showed that the number of individuals filing for initial jobless claims in the U.S. hit a two-month high last week, rising by 16,000 to 360,000, according to the Labor Department, defying expectations for a drop of 4,000 to 340,000, which sent prices gaining further.

A separate report showed that U.S. import prices fell 0.2% on a yearly basis in June, above expectations for a 0.1% decline, while exports prices rose 0.2% year-over-year, undershooting expectations for a 0.4% rise.

Elsewhere on the Comex, silver for September delivery was up 4.19% at USD19.968 a troy ounce, while copper for September delivery was up 2.84% and trading at USD3.179 a pound. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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.

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