Gold holds near 1-week high, Fed eyed
Gold rebounded from light falls to trade near a one-week high on Wednesday, as the dollar fell and investors awaited Federal Reserve Chairman Ben Bernanke’s speech later on Wednesday for clues on whether it will taper stimulus measures soon.
Earlier in the session, gold had slipped after weak Chinese trade data raised fears of an economic slowdown in the world’s second-biggest consumer of the metal.
Bullion has fallen nearly 10 per cent since Bernanke said last month the US economy was recovering strongly enough to slow the pace of the Fed’s $85 billion (Dh312 billion) monthly bond purchases.
“Some are hoping to see the Fed making an effort to calm the markets,” said a Hong Kong-based trader. The trader said prices may see some support if the Fed decides to taper in December or later, instead of current expectations of a September wind down.
Spot gold gained 0.35 per cent to $1,253.16 an ounce by 7.37 GMT on Wednesday, after falling as low as $1,243.54 earlier. Comex gold rose $6 to $1,252.
Gold for immediate delivery hit a one-week high of $1,260.01 on Tuesday, helped by higher-than-expected Chinese inflation data and physical demand.
The Fed releases minutes from its June policy meeting at 6pm GMT and Bernanke is due to speak at a conference later on.
Several Fed officials have tried to reassure global markets after Bernanke’s comments in June caused panic. Gold fell to a near three-year low of $1,180.71.
The Fed’s bond purchases have raised worries about inflation, boosting demand for gold, which is seen as a hedge against rising prices. The stimulus measures have also boosted liquidity overall and driven funds into commodities.