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Gold shoots up as Federal Reserve chief won't rule out stimulus

Commodities Aug 31, 2012 10:59AM ET
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Investing.com - Gold prices shot up in U.S. trading on Friday after Federal Reserve Chairman Ben Bernanke said U.S. monetary authorities won't rule out the use of stimulus measures to jolt the economy, which would weaken gold's traditional hedge, the dollar.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery were up 0.76% and trading at USD1,667.45 a troy ounce, up from a session low of USD1,646.45 and down from a high of USD1,671.55 a troy ounce early during the session.

Gold futures were likely to test support at USD1,646.45 a troy ounce, the earlier low, and resistance at USD1,677.45, the high from Aug. 27.

Bernanke said in his speech at the Fed's annual symposium in Jackson Hole, Wyoming, that the Fed remains ready to intervene with stimulus though the speech made no mention for more specific plans.

"The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant," Bernanke said in prepared remarks at his speech.

"Over the past five years, the Federal Reserve has acted to support economic growth and foster job creation, and it is important to achieve further progress, particularly in the labor market. Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."

Gold cooled its gains, though, as despite Bernanke's dovish comments, some investors were hoping for more definitive hints as to the direction of U.S. monetary policy.

Elsewhere on the Comex, silver for December delivery was up 1.69% and trading at USD30.962 a troy ounce, while copper for December delivery was down 0.34% and trading at USD3.435 a pound.









Gold shoots up as Federal Reserve chief won't rule out stimulus
 

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Basil Joseph
Basil Joseph Sep 03, 2012 12:43AM ET
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buy gold... can go till 32600
 
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