NEW YORK — Gold rose to its highest since April in volatile trade on Friday on speculation of new US stimulus after Federal Reserve Chairman Ben Bernanke said in a key speech that progress to bring down unemployment was too slow and the central bank would act as needed.
Spot gold was up 1.1 percent at $1,674.30 an ounce by 11:08 a.m. EDT (1508 GMT), rebounding from a low of $1,646.73 an ounce.
It climbed to a high of $1,677.80 an ounce, which marked the loftiest price since April 12.
US COMEX gold futures for December delivery were up $19.90 an ounce at $1,677, with trading volume on track to finish at its highest level in a month, preliminary Reuters data showed.
Among other precious metals, silver jumped 2.2 percent to $31.08 an ounce. Platinum was up 1.5 percent at $1,523.99 an ounce, while palladium inched up 0.9 percent at $620.50 an ounce.
The metal fell immediately following the release of Bernanke’s speech at the economic symposium in Jackson Hole, Wyoming as markets were disappointed over a lack of imminent stimulus. Investors had expected the Fed chief to send a strong message about a new round of bond-buyback known as quantitative easing (QE).
However, bullion quickly rebounded $30 per ounce, or almost 2 percent, from the low as markets later interpreted his comments as stimulus friendly. US equities and commodities also reversed course to turn sharply higher as the dollar fell sharply after Bernanke’s remarks.
"The main catalyst for the reversal in gold has been that Bernanke used the words ’grave concern’ and the interpretation is that there’s going to be more QE if he’s using such dire projection for the economy," said Jeffrey Sica, chief investment officer of SICA Wealth Management. — Reuters