Gold Continues Rising After Bernanke's Speech, Platinum Climbs

Precious gold resumed its rise on Tuesday trading after Fed Chairman Ben Bernanke suggested there is no rush to withdraw stimulus, enhancing demand on the metal as an inflation hedge.

Eyes were on Bernanke's speech yesterday, yet he did not tackle issues related to QE as anticipated by markets as he focused on the need to raise debt ceiling to avoid the so-called fiscal cliff. But he noted that he is not satisfied with the current unemployment rate of 7.8% which indicates the Fed is likely to continue with its monetary easing polices to support the vulnerable labor market, noting that his comments came in line with Federal Reserve of Chicago President Charles Evans.

Gold rose for a second day to trade around $1674.77 an ounce, after opening at $1667.77, as the breach of tough resistance at $1661.53 which represents SMA 200 level on the daily charts, paved the way for the advance, where it may continue its surge as it is currently trading above strong resistance at $1670, which constitutes SMA 50 level on the weekly charts.

The trading range for today is expected among the key support at $1625.00 and the key resistance now at $1695.00.

In fact, gold's appeal increases at times central banks are easing their monetary stance, noting that the yellow metal recorded its 12th consecutive yearly rise in 2012 on central bank's stimuli and gained 70% as the Fed bought $2.3 trillion of debt in two rounds from December 2008 through June 2011. On the other hand, gold plunged to the lowest level in four months on January 4 after Federal Reserve minutes indicated policy makers may end $85 billion in monthly bond purchases sometime this year.

Markets are also waiting for further monetary easing by the BoJ in their coming meeting on January 21-22, especially after the new Japanese Premier Abe Shinzo Abe said he will select a new governor for the BoJ in April who is open to expanding non-standard measures.

In the FX market, the dollar remained weak trading near the lowest level 1-1/2-week low against a basket of major currencies, as indicated by the Dollar Index which dipped to a low of 79.35 while it currently hovers around 79.53.

Crude oil for February's delivery retreated to trade around $93.81 a barrel from the day's opening of $94.18.

Among other precious metals, silver edged up to $31.14 from the day's opening of $31.05, platinum skyrocketed to 3-month high around $1691.00 from $1652.86, and palladium soared to $713.25 from $703.30.

Platinum jumped today on supply concerns after Anglo American Platinum, the world`s biggest producer of the metal, said it may sell or shut its Union mine.