Gold rises ahead of Fed’s statement

LONDON: Gold rose back towards US$1,625 an ounce on Thursday after a Chinese rate cut hurt the dollar, and as investors geared up for a Federal Reserve statement later which will be closely watched for clues as to the future direction of US monetary policy.

China’s central bank cut benchmark interest rates by 25 basis points in a surprise move to shore up slackening economic growth, its first rate reduction since the depths of the 2008/2009 financial crisis. The dollar fell in response.

Investors are now waiting to scrutinize Fed chairman Ben Bernanke’s testimony in front of a congressional committee for any sign of intent to further ease money supply.

That would buoy gold’s appeal as an alternative store of wealth to potentially volatile currencies

Spot gold was up 0.4 percent at $1,624.70 an ounce at 7:26 a.m. EDT (1126 GMT), off an earlier low of $1,612.64 an ounce, while US gold futures for August delivery were down $8.70 an ounce at $1,625.50.

Prices have eased a touch this week after posting their biggest one-day rise in more than three years on Friday after disappointing US jobs data reignited speculation that the Fed would unleash another round of monetary easing. — Reuters