Forexpros – Gold prices rose in Asian trading on Thursday in wake of Federal Reserve Chairman Ben Bernanke’s comments that the Fed cannot rule out the need to weaken the dollar via monetary stimulus measures should the economy merit such a move down the road.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded up 0.08% at USD1,643.65 a troy ounce.
Gold traded at a low of USD1,642.45 a troy ounce and hit a high of USD1,646.25 a troy ounce during the session.
The precious metal sought to test support at USD1,625.55 a troy ounce, the low of April 25, and resistance at USD1,650.05, the high on April 24.
The Federal Open Market Committee, the Fed’s rate-setting body, wrapped up its April meeting earlier with a statement announcing no change to monetary policy.
The statement did not address any need for quantitative easing, which are bond buybacks from banks designed to stimulate the economy at the dollar’s expense.
Since talk of easing sends the dollar falling, no mention of it prompted the dollar’s traditional hedge, gold to drop.
However, at a press conference just after releasing the official statement, Bernanke told reporters quantitative easing is still in the Fed’s tool chest to fight off deflationary decline and rising unemployment, if needed.
“We remain entirely prepared to take additional balance sheet actions if necessary to achieve our objectives,” Bernanke said at the news conference.
“Those tools remain very much on the table and we will not hesitate to use them should the economy require that additional support.”
The news sent gold sharply reversing earlier losses in U.S. trading and hanging onto its gains upon Asia’s opening.
Elsewhere on the Comex, silver for July delivery was up 0.96% and trading at USD30.718 a troy ounce, while copper for July delivery was down 0.19% and trading at USD3.711 a pound.
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