Gold Near One-Week High As Bernanke Backs Easing
ICN.com | Feb 27, 2013 04:40AM ET
Gold trades lower on Wednesday settling near its highest in more than a week recorded in the previous session as comments from the U.S. Federal Reserve chairman Ben Bernanke signaled the central bank’s stimulus will continue, reducing bullions` appeal as a hedge against inflation.
Spot gold is trading around $1609.96 per ounce by 09:12 (GMT+2) after opening at $1613.16, and hit a high of $1614.72 and a low of 1609.23 an ounce.
Silver traded at $29.23 an ounce after opening at $29.37, hitting high at $29.40 and low at $29.18 an ounce.
Bernanke strongly defended the Fed’s stimulus program in his testimony on Tuesday before the Senate Banking Committee and quieted recent rumblings over the central bank pulling back its asset-buying program, which were set off after Fed’s minutes last week.
Bernanke’s comments helped allay investors’ concerns over a stalemate in Italy after a general election failed to give any party a parliamentary majority, where worries about further political instability in Italy triggered fears that the Eurozone`s third-largest economy could drag the bloc into another crisis.
Bernanke will remain the focus of the market as he is expected to deliver testimony before the House Financial Services Committee later today.
As of 09:09 (GMT+2), the dollar index trades around 81.77 after opening at 81.85, where it hit a high of 81.90 and a low of 81.75.
Gold prices rose on Tuesday to a 1-1/2-week high as investors turned to the metal for its safe-haven appeal following an election that resulted in a political gridlock in Italy.
Pier Luigi Bersani`s centre-left bloc won the lower house vote but has failed to secure a majority in the Senate. Centre-right leader Silvio Berlusconi, who won the upper house vote said fresh elections should be avoided.
The euro is currently trading at $1.3082 as of 09:10 AM (GMT +2) after opening at $1.3059. The EUR/USD pair has so far set a session high at $1.3084 and low of $1.3040.
Moreover, Goldman Sachs slashed its 2013 gold price forecast saying the recent drop in the metal`s price represent an increase in U.S. real interest rates. The bank cut this year price forecasts to $1,600 an ounce from $1.810 an ounce and slashed 2014 forecast to $1,450 an ounce from $1,750 an ounce.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.