Spot gold edges higher after Post-Bernanke Slump
LONDON (July 18) Gold prices edged higher in cautious trade Thursday as investors continued to digest U.S. Federal Reserve Chairman Bernanke's monetary policy comments and investment interest picked up at lower prices.
Gold prices initially rose Wednesday after Mr. Bernanke said the uneven U.S. economic recovery likely would require accommodative monetary policy for the foreseeable future. Some investors buy gold as a hedge against the inflation that can follow easy monetary policies.
Specific detail on just how long the Fed's stimulus measures will remain in full force was scant, however, and gold prices eventually settled 1.5% lower on the European spot market Wednesday. A stronger dollar also weighed on gold, which is priced in dollars and is less affordable to other currency holders when the greenback gains.
"Ben Bernanke's testimony in front of the House Financial Services Committee turned out to be a bit of a disappointment given all the hype in the lead up to it," said Craig Erlam, a market analyst at Alpari U.K. "Bernanke essentially claimed that the Fed remains flexible on its asset purchases and could begin tapering earlier, as expected or later, depending on how the economy performs."
Gold prices stabilized Thursday, as lower prices attracted some opportunistic buying, said analysts. At 0840 GMT, spot gold was up 0.3% at $1.277.42 a troy ounce.
"Asian markets seemed to provide strong support for gold prices, possibly awaiting further indication on Ben Bernanke's policy slant as he continues to testify today," said Joyce Liu, an investment analyst at Phillip Futures.
Mr. Bernanke is scheduled to present a monetary policy report at 1430 GMT.
In other precious metals Thursday, spot silver was up 0.6% at $19.350 an ounce at 0839 GMT, spot platinum was 0.1% lower at $1,404.25 an ounce and spot palladium was 0.5% lower at $728.20 an ounce.
