| 11 September 2012-Gold edges higher ahead of German ESM ruling, Fed meeting |
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Gold edges higher ahead of German ESM ruling, Fed meeting By Forexpros from http://www.forexpros.com/news/commodities-news/gold-edges-higher-ahead-of-german-esm-ruling,-fed-meeting-238190 Forexpros - Gold futures edged higher during European morning hours on Tuesday, as investors looked ahead to a key German Constitutional Court ruling as well as the conclusion of the Federal Reserve’s two-day policy meeting, both due later this week. On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,730.35 a troy ounce during European morning trade, easing up 0.1%. Prices were stuck in a tight trading range of USD1,726.65 a troy ounce, the daily low and a session high of USD1,732.45 a troy ounce. Gold futures rallied to USD1,741.95 a troy ounce last Friday, the highest since February 29. Gold prices were likely to find support at USD1,685.35 a troy ounce, the low from September 3 and at USD1,761.85, the high from February 20. Market players awaited a key German court ruling on Wednesday on whether the euro zone's permanent bailout fund, the European Stability Mechanism, is compatible with German law. Germany’s approval will be necessary in order to implement the European Central Bank’s bond purchasing program announced last week, dubbed Outright Monetary Transactions. Meanwhile, markets continued to eye the outcome of the Fed’s policy meeting on Thursday, amid fresh speculation that the U.S. central bank may announce a third round of quantitative easing to boost growth. In a speech delivered in Jackson Hole, Wyoming, last month, Fed chief Ben Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth. Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system. Gold prices have rallied on past monetary stimulus measures. Investors tend to flock to gold on fears that excess liquidity would erode the value of fiat currencies and spark inflation. The precious metal is widely considered a hedge against rising consumer prices and a store of value. Elsewhere on the Comex, silver for December delivery was little changed to trade at USD33.63 a troy ounce, while copper for December delivery shed 0.3% to trade at USD3.678 a pound. |
