PRECIOUS-Gold climbs to near 5-week high on Fed stimulus hopes
* Gold up for 4th day on bets Fed will keep stimulus * Prices climb close to 5-week high hit on Monday * Gold due for correction, physical demand could weigh -analysts (Updates prices) By A. Ananthalakshmi SINGAPORE, Oct 29 (Reuters) - Gold gained for a fourth session on Tuesday, edging closer to a five-week high, as weak U.S. economic data boosted expectations for the Federal Reserve to maintain its stimulus measures, burnishing the metal's appeal as an inflation hedge. The Fed begins a two-day policy meeting on Tuesday in which it is widely expected to confirm it will continue buying bonds at an $85 billion monthly pace. Gold prices have fallen nearly 20 percent this year on fears the Fed could begin tapering the stimulus, but a budget battle in Washington and a string of weak economic data have raised questions over whether it will scale back, giving bullion a boost. "In line with market expectations, we think the Fed will continue with quantitative easing," said Songwut Apirakkhit, managing director of Globlex Holding Management in Bangkok. "However, we think the expectations have already been priced in and gold is due for a correction," he said. He still expects gold to end the year around current levels. Spot gold had edged up 0.1 percent to $1,353.46 an ounce by 0740 GMT. It has gained about 8 percent since marking a three-month low on Oct. 15. The metal earlier hit a session high of $1,360.06, not far from its five-week peak of $1,361.60 touched on Monday. U.S. manufacturing output barely rose in September and contracts to buy previously owned homes recorded their largest drop in nearly 3-1/2 years, the latest signs the economy's momentum ebbed as the third quarter ended. Many economists believe the Fed could push tapering to early next year. Though a prolonged period of easy money could support gold, physical demand could take a hit due to the higher prices. Demand in Asia has been subdued for a while. "We continue to view gold as precariously placed, while physical demand for the metal remains soft," ANZ analysts said in a note. "We viewed the metal as overbought above $1,340 on the back of weak demand from China and continued ETF selling." Outflows from gold-backed exchange traded funds have continued, weighing on investor sentiment. Precious metals prices 0740 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1353.46 1.87 +0.14 -19.17 Spot Silver 22.54 0.07 +0.31 -25.56 Spot Platinum 1467.24 -2.76 -0.19 -4.41 Spot Palladium 742.50 -1.00 -0.13 7.30 COMEX GOLD DEC3 1353.70 1.50 +0.11 -19.22 20423 COMEX SILVER DEC3 22.55 0.01 +0.05 -25.59 6278 Euro/Dollar 1.3786 Dollar/Yen 97.50 COMEX gold and silver contracts show the most active months (Reporting by A. Ananthalakshmi; Editing by Clarence Fernandez)
- Alabama man gets $1,000 in police settlement, his lawyers get $459,000
- Doctor who worked in Africa first Ebola case in New York City |
- Exclusive: Charred tanks in Ukraine point to Russian involvement
- Ground offensive against Islamic State months away in Iraq: U.S.
- U.S. stock futures tumble on reports of NY Ebola case