Monday, July 22, 2013

Gold hits 1-month high as dollar falls on Fed stimulus-exit prospects...

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Gold prices climbed on Monday tailing a third consecutive gain day as reduced expectations that the U.S. Federal Reserve will soon taper the bullion-friendly stimulus program boosted the metal at the expense of the U.S. dollar.As of 03:16 ET, gold for immediate delivery climbed 1.81 percent, or 23.47 points, to $ 1,317.23 after opening at $1,296.19. Earlier in the session, it hit a high of $1,322.86 and a low of $1,296.00. 

Dollar-governed gold advanced after greenback fell against key rivals as Fed Chairman Ben Bernanke’s comments on stimulus lacked confirmation on when the central bank will start scaling back its stimulus.

Expectations the Fed will pare back its $85 billion-per-month bond purchase program took the toll on bullions. The Fed`s quantitative easing schemes have boosted gold’s appeal as a hedge against inflation.

The dollar index--a gauge measuring the strength of the greenback against a bundle of major currencies--was in a jumble in line with the recent sell-off that started with Ben Bernanke’s dovish comments last week. The USDIX fell on Monday to trade around 82.57 after opening at 82.69, hitting a high of 82.72 and a low of 82.48.

Other precious metals tracked gold higher where:

- Silver gained 2.44% to trade around $ 19.98

- Platinum went up 0.59% to $ 1,438.55

- Palladium inched 0.09% up to $ 750.70

In Japan, Japanese voters handed a landslide victory to the governing Liberal Democrats in parliamentary elections on Sunday. Prime Minister Shinzo Abe was given a solid platform to continue with his aggressive monetary stimulus push to boost the world`s third biggest economy.

By securing control of both houses of Parliament for up to three years, the win offers Prime Minister Shinzo Abe the chance to end their nation’s economic slump. A victory for Abe, whose "Abenomics" program aimed at sparking an economic revival, was widely expected.

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