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Forexpros – Gold futures traded higher in Asian trade Wednesday, following U.S. Fed chief Ben Bernanke’s gloomy assessment of the U.S. economy and renewed hopes for imminent action to address Europe’s sovereign debt crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,627.35 a troy ounce during early Asian trade, adding 0.25%, after hitting a low of USDS1,621.25.
Earlier Tuesday, finance officials from the European Union were reported studying ways to coordinate a recapitalization of regional financial institutions, conceding that not enough had been done to reassure investors that European banks would remain solvent.
“There is an increasingly shared view that we need a concerted, coordinated approach in Europe. There is a sense of urgency among ministers and we need to move on,” said Olie Rehn, European commissioner for economic affairs.
But gold’s upside was curbed by comments from Federal Reserve Chairman Ben Bernanke who painted a bleak picture for the U.S. economy, saying that the recovery was “close to faltering,” diminishing the precious metal’s allure as a hedge against inflation.
Wall Street shares put together a late session rally on news from Europe, with the benchmark Dow Jones recovering from as much as 200 points lower.
The Dow Jones Industrial Average added 1.44% to 10,808.70, the Nasdaq Composite Index rose 2.95% to 2,404.82, and the S&P 500 was lifted 2.25% to end the day at 1,123.95.
Earlier in the day, the U.S. Census Bureau reported that factory orders declined by a seasonally adjusted 0.2% in August, down from a 2.1% gain in the previous month. Economists had forecast a 0.1% fall.
Meanwhile, global financial provider Credit Suisse raised its 2012 forecast for gold by 19% to USD1,850 an ounce, citing “uncertainty and dislocations in financial markets.”
Credit Suisse also raised it 2012 forecast for silver by 12% to USD34 an ounce.
On the Comex, silver for December delivery dropped 0.18% to trade at USD30.05 a troy ounce, while copper for December delivery added 0.10% to trade at USD3.135 a pound.
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