Gold noses at $1,650 per oz after Fed meeting

Thu Apr 26, 2012 10:29am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jan Harvey and Amanda Cooper

(Reuters) - Gold rose for a third day on Thursday as weak employment figures and a pledge by the Federal Reserve the previous day to keep interest rates near zero weighed on the dollar and teased out some investor demand.

Data showed first-time claims for unemployment benefits in the United States were broadly unchanged last week, while a longer-term gauge rose to its highest level since January, undermining the dollar..

Gold usually trades inversely to the dollar as weakness in the U.S. currency makes it cheaper for non-U.S. investors to buy the metal.

Spot gold was up 0.4 percent at $1,649.84 an ounce at 1355 GMT, while U.S. gold futures for June delivery were up 0.5 percent at $1,651.00.

"There is little reason to sell gold at the moment," Andrey Kryuchenkov, an analyst at VTB Capital, said. "Risk aversion is not where it should be for gold to rally much, but at the same time sentiment is cautious at best."

He said support for gold would remain in the longer term in the form of central bank purchases and inflows into exchange-traded products, where investors tend to display less sensitivity to sharper declines in the gold price.

The U.S. unemployment data provided the latest sign of a weaker pace of healing in the still struggling labor market.

The figures helped gold extend the day's gains, but the main impetus came from the Fed's statement on Wednesday following a two-day policy meeting, in which it repeated its commitment to leave U.S. rates unchanged until at least 2014.   Continued...