Gold Prices Climb as Fed's Evans Backs Easing Efforts (Update 1)

Updated from 11:13 a.m. EST with settlement prices

NEW YORK ( TheStreet) -- Gold prices jumped Monday morning after Chicago Fed President Charles Evans said that further monetary easing would be necessary for now. Gold prices fell 1% on Friday.

Gold for February delivery rose $8.80 to settle at $1,669.40 an ounce at the Comex division of the New York Mercantile Exchnage. The gold price traded as high as $1,674.80 and as low as $1,659.50 an ounce, while the spot price was increasing $5.20.

"He Evans came out and reaffirmed that quantitative easing is in place right now, they don't see any reason why they would stop the quantitative easing at the moment," said Phil Streible, senior commodities broker at RJO Futures. "Remember, we need to get growth continuously above 2%, we also need to get the unemployment rate down near 6% in order for them to pull off the throttle of QE."

Silver prices for March delivery popped 70 cents to $31.11 an ounce, while the U.S. dollar index was off 0.03% to $79.53.

Evans remarks came Monday at a forum in Hong Kong, where he said that monetary stimulus would continue until the economy created 1 million to 1.5 million jobs during a six-month to 12-month span, The Wall Street Journal reported.

With the December unemployment rate holding at 7.8%, after November's upwardly revision to that level, the monthly report that printed Jan. 4 failed to show a strong trend toward substantially lower unemployment in the near term.

Streible said it doesn't look like this would happen anytime soon and said traders should use the lower prices that have been characteristic of gold prices in recent weeks to jump back in to build a position in the yellow metal.

Federal Reserve Chairman Ben Bernanke is scheduled to speak Monday at the Gerald Ford School of Public Policy at the University of Michigan after equity markets close, and Streible said the Fed chief likely would repeat many of the forecasts Evans enumerated in his speech and add that the central bank is monitoring other global economic events as well.

The euro was slightly higher against the U.S. dollar at $1.3367, up from Friday's close at $1.3363. The move continued a winning streak for the eurozone's common currency, which has benefited from European Central Bank President Mario Draghi's comment last Thursday that he believed the region would see economic activity gradually recover in 2013.

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