Futures Market News
Bernanke speech likely to drop prices of gold futures
Aug 29, 2011 05:31 AM
Gold futures are poised to drop in value on Monday, pushed down by the U.S. Federal Reserve chief stating late last week that growth will resume, according to Bloomberg.
Ben Bernanke's speech at the Fed's annual symposium in Jackson Hole, Wyoming, on Friday enhanced conjecture about the central bank declining to add more financial and economic stimulus. That, in turn, pushed down demand for storage haven.
"We believe gold is an insurance policy against a rising probability of worsening global systemic risks and the recent price decline provides a buying opportunity," states a Monday research note by Morgan Stanley analysts.
At 6:05 a.m. on Monday, gold futures increased 1.2 percent, a $21.50 rise to $1,818.80 per troy ounce.
The precious metal is now less than $100 from its record price of $1,917.90, which was set one week ago. Speculation suggested bullion was going to surpass $2,000 per troy ounce by the end of the month, which is this Wednesday.
Reuters reports Chinese gold demand in August, typically a slower month for sale of the precious metal, has been steady. One store manager said gold's price hikes have "sparked another gold-buying craze."
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