Gold rises as Bernanke silent on stimulus options

AP News
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Posted: Sep 08, 2011 3:55 PM
Gold rises as Bernanke silent on stimulus options

Gold prices rose Thursday after Federal Reserve Chairman Ben Bernanke offered no new clues about what steps central bank policymakers may take to help the sluggish economy.

Gold for December delivery rose $39.90 to end at $1,857.50 an ounce. Other metals prices rose while grains and beans fell. Energy products were mixed.

Bernanke's comments came ahead of a two-day meeting later this month where the Fed is expected to consider a range of options to help boost the economy.

Bernanke said several factors have kept consumers from spending more, including concerns about high unemployment, declining home values and a temporary increase in fuel and other energy prices.

Bernanke said the Fed will consider range of policy options at its next meeting later this month, but he didn't offer specific insight into what it might do. His comments were similar to a speech he gave last month in Jackson, Wyo.

Gold also rose on discouraging news about the U.S. jobs market. The Labor Department said weekly applications for unemployment benefits rose 2,000 to 414,000. Applications need to fall below 375,000 to indicate sustainable job growth.

In addition, the Organization for Economic Cooperation and Development cut its economic growth forecast for the United States to 1.4 percent this year from its previous forecast of 2.6 percent. The Paris-based agency also reduced the growth forecast for the combined economies of Germany, France and Italy to less than 1 percent compared with its previous forecast of 2 percent.

Gold has been volatile in the past several weeks as investors closely monitor global economic data and comments by monetary officials and political leaders.

Gold's closing price has ranged widely, from $1,621.70 an ounce on Aug. 1 to $1,891.90 an ounce on Aug. 22. It fell back to $1,757.30 an ounce just two days later. This week, the price has been in the $1,800 range.

CPM Group analyst Carlos Sanchez said he would not be surprised to see gold prices remain volatile until there is a better idea of how the economy will fare this year. He predicted that gold could reach $2,000 an ounce by year-end before starting to fall as the economy begins to improve in the first half of 2012.

Silver, platinum and palladium all rose along with gold. December silver rose 89.9 cents to end at $42.53 an ounce, October platinum increased $25.80 to $1,854.50 an ounce and December palladium rose $12.60 to $765.30 an ounce.

December copper increased 1.15 cents to finish at $4.1435 a pound.

Energy prices were mixed.

Benchmark crude fell 29 cents to $89.05 per barrel on the New York Mercantile Exchange. Heating oil fell 3.13 cents to $3.0443 per gallon, gasoline fell 2.28 cents to $2.8852 per gallon and natural gas rose 4 cents to $3.98 per 1,000 cubic feet.

Wheat, corn and soybeans all finished lower. December wheat fell 13.5 cents to end at $7.38 per bushel, December corn dropped 14 cents to $7.34 per bushel and November soybeans fell 2.5 cents to $14.1825 per bushel.

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AP Economics Writer Martin Crutsinger contributed to this report.