Gold has made its biggest monthly gain this August since November 2009. This rise has been credited towards bets that the Federal Reserve is going to take more action to spur growth in the United States economy as well as the uncertainty in the global economy.
Pham-Duy Nguyen, Bloomberg
On Wednesday August 31, 2011, 2:28 pm EDT
Gold rose in New York, capping the biggest monthly gain since November 2009, on speculation that the Federal Reserve will take more action to spur growth.
Minutes released yesterday from the Fed’s meeting earlier this month showed some policy makers favored more aggressive action to stimulate growth. The Dow Jones Industrial Average rose as much as 1.3 percent to the highest in almost four weeks, erasing its 2011 loss. Gold is up 12 percent this month after touching an all-time high of $1,917.90 an ounce on Aug. 23.
“Equities are reasserting themselves, but in the backdrop, traders know the Fed is going to do something to stimulate the economy, so sell-offs in gold are being bought,” Adam Klopfenstein, a strategist at MF Global in Chicago, said in a telephone interview.
Gold futures for December delivery rose $1.90, or 0.1 percent, to settle at $1,831.70 at 1:56 p.m. on the Comex. The most-active contract has risen 29 percent this year.
Earlier, the price dropped as much as 0.9 percent as equities rallied. Gold surged in August on mounting speculation that the U.S. economic recovery will falter and as the Federal Reserve pledged to keep borrowing costs at a record low until mid-2013. This month, the metal also reached records in euros and British pounds amid Europe’s sovereign-debt crisis.
“With stocks rallying, there’s just an excuse for investors to take profits on gold,” Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago, said in a telephone interview.
Silver futures for December delivery rose 30.4 cents, or 0.7 percent, to $41.768 an ounce on the Comex, capping a 4.1 percent gain in August.
On the New York Mercantile Exchange, platinum futures for October delivery climbed $3.10, or 0.2 percent, to $1,856.20 an ounce. Palladium futures for December delivery gained $11.15, or 1.4 percent, to $790.45 an ounce.
This month, palladium fell 4.5 percent and platinum gained 4 percent.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at firstname.lastname@example.org.
To contact the editor responsible for this story: Steve Stroth at email@example.com
To see original article CLICK HERE