Gold futures rallied by nearly $50 an ounce Thursday after Federal Reserve Chairman Ben Bernanke said U.S. interest rates will remain low to aid economic growth. Gold for August delivery climbed $39.40, or 3.2%, to $1,286.60 an ounce in electronic trade. At an appearance in Boston late Wednesday, Bernanke indicated that the U.S. central bank wouldn't rush to raise interest rates, even after the unemployment rate reaches the Fed's target of 6.5%. Ahead of his remarks, minutes from the Fed's meeting in June showed that half of the policy-setting board's members backed paring bond purchases by the end of this year. On the other hand, "many" other members said it's likely asset purchases would be needed into 2014. The signal that the Fed will likely maintain an accommodative policy stance boosted gold prices, as quantitative easing by the Fed and other central banks worldwide has been seen as supporting a rally in gold in recent years. The Fed's message also hit the U.S. dollar , which took a beating on the prospect of further monetary easing. A weaker greenback benefits dollar-denominated commodities such as gold as it makes them less expensive for holders of other currencies. From his view, Chris Weston, chief market strategist at IG, told clients in a note that "if you were to put the [Fed] meeting in isolation, you'd say the minutes were hawkish as roughly half of the board sits in the camp that believes purchases should stop by the end of the year." Ahead of the Fed minutes, August gold closed up $1.50, or 0.1%, to settle at $1,247.40 an ounce. Thursday's move in gold put prices on track for a fourth consecutive day of gains. Justin Smirk, senior analyst at Westpac, said "opportunity buying" in gold was driving prices more than anything specific, and added that he "wouldn't expect this to last" as profit-taking will likely start in the next few days, according to a quote from Dow Jones Newswires. Gold has had a rough year in part on expectations that the Fed will start to taper bond purchases. The precious metal dropped 23% in value in the second quarter and is down nearly 26% on year-to-date basis. On Thursday, silver for September delivery jumped $1.01, or 5.2%, to $20.16 an ounce and September copper claimed at 10-cent, or 3.3%, gain to $3.19 a pound. Platinum for October delivery gained $32.50, or 2.4%, to $1,400.60 and September palladium notched a rise of $10.90, or 1.5%, to $724.70 an ounce. Source : Marketwatch
