Gold rose for the second time in three sessions on speculation that the world's policy makers will take measures to stimulate economic growth pushing investors towards investing in gold as an inflation hedge. Many experts are predicting more easing from central banks which will certainly raise the value of gold.
By Debarati Roy and Glenys Sim
Jun 5, 2012 5:54 AM MT
Gold futures rose in New York for the second time in three sessions on speculation that the world’s policy makers will take measures to stimulate economic growth, reviving demand for the metal as an inflation hedge.
The finance ministers and central bank governors from the Group of Seven nations plan to hold telephone discussions today before a summit of leaders from the Group of 20 in Los Cabos, Mexico. The Federal Reserve purchased $2.3 trillion of debt in two rounds of so-called quantitative easing from December 2008 to June 2011 to boost the economy, helping gold surge to a record $1.923.70 an ounce in September.
“We could see some form of easing” of monetary policy to combat the effect of Europe’s debt crisis on the world economy, Tim Gardiner, managing director at Toronto-Dominion Bank (TD), said in a telephone interview in New York.
Gold futures for August delivery rose 0.4 percent to $1,621.10 an ounce at 8:53 a.m. on the Comex in New York.
Prices slumped 6 percent last month as the dollar rallied 5.4 percent against a basket of six currencies, including the euro.
“Gold has been trying to re-assert itself as a safe haven,” said Feng Liang, an analyst at GF Futures Co., a unit of China’s second-largest listed brokerage. “However, the dollar’s strength will continue to act as resistance to rising prices.”
Silver futures for July delivery advanced 1.5 percent to $28.43 an ounce on the Comex.
To contact the reporters on this story: Debarati Roy in New York at email@example.com; Glenys Sim in Singapore 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