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Gold gains as investors bet Federal Reserve will keep policy loose

Published 12/10/2012, 03:30 PM
Updated 12/10/2012, 03:30 PM
Investing.com - Gold prices rose in U.S. trading on Monday as sentiments continued to build that the Federal Reserve will make no hints to tightening its ultra-loose monetary policies that weaken the dollar to promote investing and job creation.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.50% at USD1,714.05 a troy ounce in U.S. trading, up from a session low of USD1,704.05 and down from a high of USD1,718.75 a troy ounce.

Gold futures were likely to test support at USD1,685.75 a troy ounce, Friday's low, and resistance at USD1,733.65, the high of Nov. 30.

Earlier on Monday, the dollar softened ahead of the Federal Reserve's monetary policy meeting this week.

Expectations continued to build that the U.S. central bank will either keep interest rates near zero and a USD40 billion bond-purchasing in place, or even consider ramping up the bond buyback program, known as quantitative easing, which weakens the dollar and holds borrowing costs down to encourage investing an hiring.

In the U.S. last week, the Bureau of Labor Statistics reported that the economy added a net 146,000 nonfarm payrolls in November, up from a downwardly revised 138,000 increase during October.

The headline unemployment rate fell to 7.7% in November from 7.9% in October, surpassing market calls for the figure to remain unchanged.

While the numbers beat expectations for the economy to add only 93,000 payrolls, investors remained convinced the economy has not strengthened to the point the Federal Reserve will alter its currently very loose monetary policies.

The Fed will address interest rates at a two-day meeting beginning Dec. 11.

Meanwhile on the Comex, silver for March delivery was up 0.52% and trading at USD33.302 a troy ounce, while copper for March delivery was up 1.13% and trading at USD3.704 a pound.







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