Gold Nears $1300 as Bernanke Backtracks

July 11, 2013 at 09:11

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Gold climbed for a fourth day to the highest level in more than two weeks after Federal Reserve Chairman Ben S. Bernanke backed sustained stimulus for the foreseeable future. Platinum touched a three-week high as silver headed for the best streak since February.

Spot gold advanced as much as 3.1 percent to $1,298.73 an ounce, the highest level since June 24, when it reached an intraday high of $1,301.78.

A fourth day of gains would be the longest winning streak since the five days through April 22. Silver climbed as much as 4.6 percent to $20.288 an ounce, the highest price since June 20.

Bullion slumped a record 23 percent last quarter as Bernanke said after the Fed’s June 18-19 meeting that the central bank may reduce its $85 billion of monthly asset purchases this year. Minutes of that meeting released yesterday showed many officials wanted to see more signs that employment is improving before backing a trim to bond buying.

“One of their mandates is to get unemployment down, but it’s not moving,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “The market’s realized that while unemployment’s stuck, they’ve got to keep stimulating.”
The unemployment rate was unchanged at 7.6 percent last month even as the economy added 195,000 jobs, government data show. The Federal Open Market Committee met before the data was released on July 5. Fed policy makers next meet July 30-31.

After the release of the minutes yesterday, Bernanke said the U.S. will need highly accommodative monetary policy for the foreseeable future, sending the U.S. Dollar Index down 1.7 percent today. Gold has fallen 23 percent this year as the dollar strengthened 3.7 percent against the six-currency basket.

Newcrest Mining Ltd., Australia’s biggest gold producer, climbed 12 percent to A$11.10 in Sydney. Zijin Mining Group Co., China’s biggest miner of the precious metal by market value, rose 5.9 percent to HK$1.61 in Hong Kong.

Silver for immediate delivery jumped 3.9 percent to $20.1422 an ounce. A fourth day of gains would be the longest winning run since the four days through Feb. 26.