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LONDON: Gold prices edged higher in Europe on Thursday, but were kept in a narrow range by uncertainty over how far the Federal Reserve will satisfy market speculation that it is set to unveil another round of measures to stimulate the US economy.
A speech by Fed chairman Ben Bernanke at a central bankers’ symposium in Jackson Hole, Wyoming, on Friday will provide clues on the chances of the Fed embarking on another asset buying programme, known as quantitative easing.
Spot gold was up 0.1 percent at $1,657.14 an ounce at 1141 GMT, while US gold futures for December delivery were down $2.90 an ounce at $1,660.10. Inflows into gold exchange-traded funds have risen sharply this month, with holdings of the largest, New York’s SPDR Gold Trust up nearly 38 tonnes so far this month, their largest monthly inflow since November. The precious metal rallied to a 4-1/2 month high on Monday as expectations grew that the Fed was willing to launch more stimulus measures, but it has failed to sustain those gains. Barclays Capital technical analysts said they too were neutral in the medium term. “We would buy gold dips toward $1,640, and stay bullish above $1,620,” it said. “Above $1,700 signals further upside potential toward $1,768/88.”
Spot silver was up 0.2 percent at $30.73 an ounce. The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, dropped to its lowest early May at 53.9, as silver made up some lost ground against gold. In a weekly note, precious metals house Heraeus said that made it vulnerable to a correction if Bernanke disappoints.
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