Sunday, September 2, 2012

Gold futures prices for week Sept 3-7 2012

Gold futures prices for week Sept 3-7 2012 : Gold futures ended Friday’s session at the highest level since late-March, after Federal Reserve Chairman Ben Bernanke indicated that the U.S. central bank could implement fresh stimulus measures to strengthen the U.S. economic recovery.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery settled at USD1,691.65 a troy ounce by close of trade on Friday, the highest level since March 27.

On the week, gold futures added 1.25%, the second consecutive weekly gain. In August, gold futures rose 4.5%, the largest monthly gain since January.

Gold futures were likely to find support at USD1,634.55 a troy ounce, the low from August 22 and near-term resistance at USD1,699.55, the high from March 27.

Gold prices rallied more than 2% Friday after Fed Chief Bernanke said he was open to more quantitative easing to help boost growth in the U.S. economy.

Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth.

Official data on Wednesday showed that the U.S. economy expanded at a seasonally adjusted annual rate of 1.7% in the three months to June, slightly higher than the preliminary estimate of 1.5%, but remained below the 2-2.5% rate required every quarter to hold the unemployment rate steady.

Bernanke downplayed the risks of quantitative easing and said the program had been effective in providing “meaningful support" to the recovery.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.

Gold gained as much as 15% earlier this year to hit USD1,790 an ounce after the Fed said in January it would keep interest rates near zero until at least late 2014 and indicated that it could introduce a fresh round of asset-purchases.

However, prices have lost almost 6% since late February, as the Fed failed to deliver more easing and amid concerns over the euro zone’s deepening debt crisis, which has fueled demand for the precious metal's hedge, the greenback.

Bernanke’s comments sparked a sell-off in the greenback, which further boosted the appeal of the precious metal.

The dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, declined 0.6% to settle the week at 81.20, the lowest since May 15.

Market players now looked ahead to the European Central Bank’s policy meeting on September 6, amid ongoing expectations the central bank will introduce fresh measures to help stabilize the euro zone's sovereign debt markets.

On Thursday, Italy saw borrowing costs ease at an auction of five and 10-year bonds, reflecting renewed optimism that European leaders are making progress in tackling the region’s debt crisis.

Gold traders will also focus on Friday’s closely-watched report on U.S. non-farm payrolls, which will allow investors to gauge the strength of the faltering labor market and the need for additional easing.

The Fed’s two-day policy meeting beginning September 12 is also on investors’ minds, amid ongoing speculation over how close the U.S. central bank is to implementing more stimulus measures.

Gold prices have rallied in recent weeks, climbing nearly 6% since August 15, amid growing hopes policymakers in the U.S., Europe and China will introduce fresh easing measures to prop up their respective economies.

Expectations of monetary stimulus tend to benefit gold, as the yellow metal is seen as a safe store of value and inflation hedge.

From a technical standpoint, the precious metal has further room to march higher after prices broke above key resistance levels on Friday, indicating bullish chart signals.

Elsewhere on the Comex, silver for December delivery settled at USD31.76 a troy ounce by close of trade on Friday, the highest since April 20. Silver prices rose 3.25% on the week and notched an impressive gain of 12% in August.

Meanwhile, copper for September delivery shed 0.65% over the week to settle at USD3.459 a pound

Copper prices have been under pressure in recent sessions amid ongoing concerns over the outlook for global economic growth.

Data released over the weekend showed that China’s Manufacturing Purchasing Managers Index contracted for the first time in nine months in August, falling to 49.2 from 50.1 in July, as new orders slumped in the face of weakening global demand.

The disappointing data added to growing fears over a deeper-than-expected slowdown in the world’s largest copper consumer.

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