London - Gold futures rallied to a one-week high on speculation that central bankers in the world’s major economies will take additional steps to spur growth, boosting demand for the precious metal as a store of value.
Federal Reserve Chairman Ben S. Bernanke said yesterday that economic conditions were far from where he would like them to be.
Slower gains in food prices led China’s inflation rate to ease more than forecast in March from a 10-month high, government data showed today, reducing pressure on policy makers to tighten credit.
The Bank of Japan last week announced stimulus measures.
“Gold is finding support from what Bernanke said and expectations of easing in China,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview.
Gold futures for June delivery climbed 0.9 percent to $1,587.10 an ounce at 10:57 a.m. on the Comex in New York, after touching $1,588.60, the highest for a most-active contract since April 2.
Trading was 25 percent below the average in the past 100 days for this time of day.
Gold declined 6.2 percent this year through yesterday as the dollar gained 3.7 percent against a basket of six major currencies.
Deutsche Bank AG, in a report today, cut its 2013 gold forecast by 12 percent to $1,637.
The bank cited rising US real interest rates and signs that a “long-term uptrend” for the dollar will curb bullion demand.
Silver futures for May delivery increased 3 percent to $27.94 an ounce in New York, heading for the biggest gain for a most-active contract since January 30. - Bloomberg News