Gold Rallies On Bernanke Stimulus Signals, BOJ Upbeat Outlook

Gold extended gains for a fourth session Thursday, hitting its highest in more than two weeks after Federal Reserve President Ben Bernanke said the central bank`s highly accommodative monetary policy would be needed for the foreseeable future to support the economy.

As of (10:02 GMT+3) gold for immediate delivery jumped 2.55 percent or 31.98 points to trade at $ 1,287.35 after opening at $1,266.69, having earlier hit a high of $1,298.64, and a low of $1,264.18.

Minutes from the Fed’s June policy meeting showed that about half of the bank`s policymakers felt the stimulus program should be scaled back by year-end, but many wanted reassurance the U.S. jobs recovery was on solid ground before withdrawing economic stimulus.

Speaking at a conference after the minutes were released, Chairman Ben Bernanke said the central bank will likely keep at least some of its easy-money policies going for the foreseeable future, noting that unemployment is still too high and inflation too low.

Bernanke reiterated that the Fed won`t consider raising short-term rates until the unemployment rate reaches 6.5%.

Tighter policies would strengthen the dollar, causing gold to become more expensive to holders of other currencies, while Stimulus efforts weaken the dollar to spur recovery, making gold a nice hedge in the process.

The USDIX is currently trading around 84.70 after opening at 84.88, after hitting a high of 84.92 and a low of 84.70.

Other precious metals were as follows:

- Silver gained 3.78% to trade around $ 20.01

- Platinum rose 2.43% to $ 1,399.40

- Palladium inched 1.66% up to $ 725.75

In a widely-expected move, the Bank of Japan (BoJ) kept monetary policy steady at the conclusion of its two-day meeting on Thursday, but raised its assessment of the economy today, referring to a recovery for the first time since before a record 2011 earthquake.

The central bank’s policy makers voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion to 70 trillion yen.

Gold holdings in the SPDR Gold Trust fell 0.07 percent to 939.08 tons on Wednesday.