Futures Market News
Metals gain on debt news
Jan 12, 2011 04:14 PM
The value of precious metals rose as Japan announced it will invest in European bonds and a Fed official stated adjusting stimulus spending is a possibility, Bloomberg reports.
To prevent ongoing asset purchasing from backfiring, the U.S. Federal Reserve could reduce the program, according to Philiadelphia Fed president Charles Plosser.
"The Fed will most likely stay on its path of easy monetary policy for longer, rather than risk derailing the recovery with a return to policy normalization prematurely," according to a Wednesday report written by Edel Tully, an analyst at UBS in London. "Such an environment remains positive for gold, as does rising European debt concerns."
Prices for gold futures for February delivery increased 3.9 percent to $1,388.20 per troy ounce. March-delivery silver futures increased 0.16 percent to $29.665 per troy ounce. March-delivery palladium futures increased $27.30 to $811.05 per troy ounce.
Japan said it will purchase European bonds, becoming the second nation to line up support for the Euro zone and its debt-hobbled banks and disheveled public finances.
"The market focus is clearly on the problems within the euro zone," Yousuke Hosokawa, a senior currency dealer in Tokyo at Chuo Mitsui Trust & Banking, told Bloomberg.
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