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Gold prices gain in Asia on easy global monetary policy views

Published 05/21/2015, 09:33 PM
Updated 05/21/2015, 09:36 PM
Gold up in Asia on easy policy views

Investing.com - Gold prices inched up in Asia Friday on sentiment of continued easy monetary policy globally.

On the Comex division of the New York Mercantile Exchange, gold for June delivery rose 0.13% to $1,205.70 a troy ounce.

Silver for July delivery rose 0.01% to $17.133 a troy ounce. Copper for July delivery fell 0.09% to $2.848 a pound.

The Bank of Japan announces its monetary policy after its two-day board meeting around 1230 Tokyo time (0330 GMT) with expectations of standing pat.

Later in the day, BoJ Governor Haruhiko Kuroda holds a news conference at 1530 (0630 GMT) to explain the board's decision.

Overnight, gold futures fell mildly on Thursday amid downbeat economic data in the U.S. , Europe and China, as metal traders digested Wednesday's release of the Federal Reserve's April meeting, which provided further indications of a delayed interest rate hike.

In the U.S., new jobless claims inched up last week by 10,000 to 274,000, after the figure remained in the 260,000 range over the previous three weeks. Still, the four-week average fell by 5,500 too 266,250, moving lower for the fourth straight week. By comparison, the four-week average peaked above 285,000 in mid-April. Continuing claims, meanwhile, declined by 12,000 to 2.21 million for the week ending May 9, nearing a 15-year low.

When the Federal Open Market Committee released the minutes from its April meeting on Wednesday, the majority of its members did not support a June interest rate, according to the minutes.

The Fed reiterated that it will take a "data-driven" approach to its when it is reasonably confident it has seen significant improvements in the economy. The Fed blamed weak first quarter GDP growth on "largely transitory factors" such as severe winter weather and a West Coast port slowdown that dented exports. Historically, economic growth has been comparatively weak in the first quarter in recent years, the FOMC added.

Investors await the release of Friday's Consumer Price Index for more hints on the Fed's next move.

In April, the FOMC said consumer price inflation continued to fall below its long-term targeted goal of 2%. Medium-term forecasts for inflation, which the Fed generally defines as the next two years, projected to "move closer but remained" below the FOMC's 2% goal. Economists expect the CPI to increase modestly for April on a monthly basis by 0.1%.

Gold, which is not attached to dividends or interest rates, struggles to compete with high yield bearing assets in periods of rising rates.

In Latvia, Greece prime minister Alexis Tsipras arrived for the latest round of talks with the nation's euro zone creditors. An extension to the Greek bailout, which expires next month is expected to be discussed at the summit in Riga, The Guardian reported.

On Thursday, the Chinese HSBC-Markit manufacturing PMI index for May increased slightly to 49.1, below forecasts of 49.3. A reading below 50 signals contraction in the sector.

The reading also provided indications that deflationary pressures are increasing, fueling speculation of the possibility for additional stimulus measures by the People's Bank of China.

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