Gold Climbs Ahead of Bernanke Testimony
Gold for June delivery at the COMEX division of the CME was increasing $16.40 to $1,394 an ounce. The gold price traded as high as $1,397.10 and as low as $1,370.60 an ounce, while the spot price was surging $33.70, according to Kitco's gold index.
Multiple Fed members emerged Tuesday and suggested that the Fed's current monthly purchases of $85 billion in longer-term Treasuries and mortgage-backed securities is the best monetary policy option in the current economic environment.
Fed Chairman Ben Bernanke will testify Wednesday morning before the Joint Economic Committee of Congress to offer his outlook for the U.S. economy.Investors likely will be monitoring Bernanke's testimony more closely than reviewing the Federal Open Market Committee's latest meeting minutes as the policy-making meeting occurred on April 30 through May 1, before nonfarm payrolls and a raft of other recent economic data emerged. It is unlikely Bernanke, known for his dovish monetary position, will hint at a tapering of quantitative easing. "To be honest, what else would he say? I don't expect to hear something really new from him or anything else to become a big surprise," Daniel Briesemann, commodities analyst at Commerzbank AG, said in a phone call from Frankfurt. "So I think, yes, he will definitely say that 'I think we're sticking to QE3 for the time being,' and I do not think he will mention an ending point." Silver prices for July delivery was up 58 cents to $23.03 an ounce, while the U.S. dollar index was 0.2% to $83.60. The Fed will release on Wednesday at 2 p.m. ET the minutes to its latest policy-making meeting. Gold mining stocks were mostly higher on Wednesday. Shares of Kinross Gold (KGC - Get Report) were surging 8.3%, while shares of Eldorado Gold (EGO - Get Report) were jumping 6.6%. Among volume leaders, Barrick Gold (ABX - Get Report) was adding 4%. Gold ETF SPDR Gold Trust (GLD) was popping 2.5% to $136.25 a share, while iShares Gold Trust (IAU) was climbing 2.6% to $13.69 a share. -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux
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