Gold rallies to $ 1320 amid optimism backed by Bernanke’s testimony...

Gold rallies to $ 1320 amid optimism backed by Bernanke’s testimony:-

NEW YORK:-  Gold prices advanced to one-month high levels in the early trades in New York on Monday. The boost came from the speculation that Federal Reserve will keep its bond purchase programme.

Spot gold gained by over $ 28 an ounce to hover above $1320 an ounce on Monday.

Upbeat sentiment gripped the bullion market after Ben Bernanke's two-day testimony, which also supported equity indices. Also, the Dollar Index posted a gain.
Last week, the yellow metal tested $1300 for a brief period in the futures market. The U.S. Comex gold futures initially rose to $1,300 on Wednesday but dropped one percent for the day, erasing the earlier gain in the week.

Gold gained rose 1.3 % last week, capping the first back-to-back weekly gains since May.

Crude oil in New York reached the highest since March 2012 on July 19.

So far, Gold prices have slid 21 % this year, wiping $58.1 billion from the value of gold exchange-traded product holdings, after some investors lost faith in the metal as a store of value.

A report by Bloomberg quoted, “Recent comments from the Fed Chairman eased worries about the Fed’s asset-purchase program and this resulted in some short covering,” Mumbai-based Kotak Commodity Services Ltd. said today in a report. The “outlook for U.S. economy and the Fed’s monetary policy stance will be key price-determining factors. Gold also gained support from firmness in crude.”

Gold for December delivery rose 1.7 % to $1,316.60 an ounce by 7:49 a.m. on the Comex in New York. Prices reached $1,325, the highest since June 20. Futures trading volume was 8 % above the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Gold for immediate delivery in London gained 1.6 % to $1,316.79.

On the other hand, silver prices too gained 2.3 % to $19.915 an ounce in New York for the September delivery. An ounce of gold bought as many as 66.6 ounces of silver on July 19 in London, the most since August 2010, data compiled by Bloomberg show.

Palladium for September delivery added 0.2 % to $751.05 an ounce, after reaching $753, the highest since June 13. Platinum for October delivery climbed as much as 0.8 % to $1,443.20 an ounce, the highest since June 19, and was last at $1,441.90.

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