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Gold Jumps After Bernanke Speech, Still Head for Weekly Loss

August 26, 2011 at 17:51 by Vladimir Vyun

Gold rose today as the decline of prices attracted investors to the precious metal. Gold also gained after Federal Reserve Chairman Ben S. Bernanke spoke about possibility of additional stimulus for the US economy, but failed to detail an actual plan a the next round of quantitative easing.

Bernanke said “the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus”. He also was rather optimistic about the economy in the longer term:

Notwithstanding the severe difficulties we currently face, I do not expect the long-run growth potential of the U.S. economy to be materially affected by the crisis and the recession if — and I stress if — our country takes the necessary steps to secure that outcome.

The statement improved sentiment on markets, but precious metals reacted somewhat strange as gold rallied, while silver fell.

Futures for delivery of gold in December rose $21.10 (1.2 percent) to $1,784.30 by 11:10 on COMEX, yet the yellow metal was still heading for the first weekly loss in eight weeks. Contract for delivery of silver in December dropped $0.003 to $40.79 per ounce. October futures for delivery of platinum advanced $2.50 (0.1 percent) to $1,824.90 per ounce on NYMEX. Contract for delivery of palladium in December gained $0.3 to $753.50 per ounce.

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