Gold Advances on Outlook for Further Stimulus From Fed
By Maria Kolesnikova on September 11, 2012 
Gold rose as the outlook for more stimulus from the U.S. Federal Reserve spurred demand for the metal as a store of value.The policy-setting Federal Open Market Committee will consider asset purchases at its Sept. 12-13 meeting, with unemployment stalled above 8 percent for 43 months. Chairman Ben S. Bernanke signaled last month that a third round of quantitative easing may be needed to reduce joblessness. Gold almost doubled from December 2008 to June 2011 as the Fed bought $2.3 trillion of debt in two previous rounds of QE.
“That’s where the focus is, especially for gold,” Marc Ground, a commodities strategist at Standard Bank Plc in Jonannesburg, said today by phone, referring to the Fed meeting. “The market is pricing in the order of $500 billion in outright easing, but I’m not sure the Fed would do something on that scale just yet. So we could see a pullback at the end of the week.”
December-delivery gold rose 0.1 percent to $1,734.10 an ounce by 7:05 a.m. on the Comex in New York. Gold for immediate delivery climbed 0.3 percent to $1,731.82 an ounce in London.
London-traded bullion rose to $1,745.40 on Sept. 7, the most expensive since Feb. 29, on speculation of additional stimulus. Assets in gold-backed exchange-traded products expanded to a record 2,480.4 metric tons yesterday, data compiled by Bloomberg show. Bullion’s so-called 14-day relative- strength index held today for a sixth day above the level of 70 that indicates to technical analysts that a drop in prices may be imminent.Physical Demand
Physical demand remains “virtually non-existent” globally, UBS AG said today in a report. The bank’s volumes to India are down 22 percent so far this month from a year-earlier period, it said.
Palladium for December delivery fell for the first day in seven, declining 0.6 percent to $668.80 an ounce. Platinum for October delivery was down 0.3 percent at $1,598.60 an ounce. Silver for December delivery was little-changed at $33.545 an ounce.
Bloomberg News
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