Precious Metals Rise to One-Week High on U.S. Stimulus Speculation
NEW YORK (Sept 27) Gold futures rose to a one-week high after Federal Reserve Bank of Chicago President Charles Evans said more signs of strength in the economy are needed to reduce asset purchases.
“I can’t have tremendous confidence in our economic situation,” Evans said today in Oslo. “A lot of developments are still under way. At the moment, the data doesn’t provide us with confidence to make major adjustments” to monetary stimulus, he said. Gold also rose on concern that the U.S. budget deadlock would shut down the government.
“Evans’ remarks are moving the market,” Peter Hug, the global trading director of Kitco Metals Inc., in Montreal, said in a report. “The focus of the market remains on the debt-ceiling impasse.”
Gold futures for December delivery added 1.1 percent to settle at $1,339.20 an ounce at 1:41 p.m. on the Comex in New York. Earlier, the price reached $1,345.20, the highest for a most-active contract since Sept. 20. The metal, up for the second straight week, has dropped 20 percent this year.
The U.S. Senate approved a bill to finance the government through Nov. 15 after removing language on cutting funding for the health care law, putting pressure on the House to avoid a federal shutdown set to start Oct. 1.
The nation faced an impasse over raising the debt ceiling in 2011 before Congress approved a plan to head off a default that was signed by the president that August. Gold reached a record $1,923.70 on Sept. 6, 2011.
Silver futures for December delivery rose 0.3 percent to $21.831 an ounce.
On the New York Mercantile Exchange, platinum futures for January delivery rose 0.3 percent to $1,419.20 an ounce.
Palladium futures for December delivery advanced 1.2 percent to $731.80 an ounce