London 26/03/2012 - Gold continued to glitter in Monday afternoon trading after Federal Reserve chairman Ben Bernanke said that US monetary policy must be accommodative to improve the nation's employment rate.
Spot gold was last up $24.38 on Friday’s close at $1,686.22-1,686.55 per ounce, close to its intraday high of $1,687.74.
The US economy will need to expand at a faster rate if it is to create enough jobs to pull down the jobless rate, Bernanke said in a speech today, which remains at high levels despite falling to 8.3 percent recently.
He hinted at further quantitative easing measures, which would be unequivocally bullish for gold because cheap money tends to debase the dollar and create future inflationary risk.
"We have had quite a decent bounce in gold this afternoon… I think that the market has been oversold," a trader said. "However, there is a limit to where this will go but dollar weakness has definitely helped push the metals complex higher today."
The euro was last at 1.3324 against the US dollar, not far from its intraday high of 1.3340 and around its highest in three weeks.
Still, capping gold's rise are the usual fears about the eurozone economy, with a host of data due this week to illuminate the severity of the crisis.
On Wednesday, money supply data will be closely watched for signs that last month's 529.5-billion-euro long-term refinancing operation (LTRO) has actually increased private-sector loans.
A lack of growth could raise negative sentiment in EU markets by affirming that there is no evidence that the LTRO programme has feed into the real economy.
On Thursday, Germany is set to report an unchanged unemployment rate of at 6.8 percent, while the rate for the eurozone as a whole is seen at 10.5-10.7 percent. In the south, unemployment rates in Spain and Greece are forecast to remain above 20 percent.
Inflation in the eurozone is forecast to fall to 2.6 percent in March from 2.7 percent previously. While this is positive, it remains well above the 2.0-percent benchmark set by the ECB.
Spanish benchmark 10-year bond yields are back above 5.5 percent for the first time since January. Spain, which has said it will not achieve its deficit target for 2012, will announce its full budget next week.
In the US today, pending home sales came in at minus 0.5 percent from an expected one percent - it was previously at two percent.
“This is disappointing data - it suggests that the housing market has yet to get into recovery mode,” FastMarkets' William Adams said.
Following the strike by Indian jewellers in protest against the government's doubling of import duties on gold to four percent, physical demand there remains low but is expected to pick up in April because of the Akshaya Tritiya festival - the second-most important festival for gold buying - at the end of the month, Standard Bank's Walter de Wet said.
Among other precious metals, silver, which fell to a two-month low of $31.10 in the previous session, was up 49 cents at $32.05-32.10 per ounce.
Platinum edged $15 higher to $1,642-1,652 per ounce, while palladium rose $5 to $661-677, having dropped to its lowest since January 18 at $648.40 in the previous session. Silver gained 50 cents to $32.76-32.83.
(Additional reporting by Clara Denina, editing by Mark Shaw)
| TIME | |||||
|---|---|---|---|---|---|
| Sydney | Tokyo | Ha Noi | HongKong | LonDon | NewYork |
| Prices By NTGOLD | ||
|---|---|---|
| We Sell | We Buy | |
| 37.5g ABC Luong Bar | ||
| 4,524.10 | 4,194.10 | |
| 1oz ABC Bullion Cast Bar | ||
| 3,764.50 | 3,444.50 | |
| 100g ABC Bullion Bar | ||
| 12,010.50 | 11,080.50 | |
| 1kg ABC Bullion Silver | ||
| 1,537.40 | 1,187.40 | |
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