Forexpros – Gold prices rose in early Asian trading Thursday as bargain hunters snapped up the yellow metal after it fell on Federal Reserve Chairman Ben Bernanke’s comments that the U.S. central bank has no plans to consider fresh stimulus measures to pump up the economy.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,714.75 a troy ounce, up 0.20%.
Gold futures were likely to test support at USD1,689.95 a troy ounce Wednesday’s low, and resistance at USD1,792.15, Wednesday’s high.
Gold prices rose on news that demand was heavy at the European Central Bank’s long-term refinancing operation.
The ECB provided EUR529 billion in three-year loans to European banks after receiving bids from 800 institutions, much more than the central bank’s first long-term refinancing operation late last year.
Easing measures such as that often send gold rising on sentiment that inflationary pressures could result.
However in the U.S., Bernanke told lawmakers that the Federal Reserve has no immediate plans to roll out a third round of quantitative easing, which are direct asset purchases from banks by the Fed.
The move sent the dollar rising and gold falling, as hints of such measures would mean increases to the U.S. money supply were likely, a situation where gold would have shined.
The metal recovered in Asian trading after prices tested support.
Gold prices are up around 14% in 2012 in part due to sentiment that quantitative easing would be needed to kick-start the U.S. economy out of its sluggishness.
The market, meanwhile, shrugged off better-than-expected gross domestic product rates out of the U.S.
The U.S. Commerce Department reported that gross domestic product rose 3.0% during the fourth quarter of last year, up from a preliminary estimate of 2.8%.
Elsewhere on the Comex, silver for May delivery was up 1.18% and trading at USD35.052 a troy ounce, while copper for May delivery was up 0.19% and trading at USD3.872 a pound.
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