After some initial uncertainty, gold prices ran up to fresh five-month highs Friday as traders seemingly concluded that Federal Reserve Chairman Ben Bernanke's highly anticipated Jackson Hole, Wyo., speech meant there is a good chance for further easing from the central bank.
The metal hit a multi-month high at the start of the week as expectations built for more monetary accommodation following minutes of the July 31-Aug. 1 meeting of the Federal Open Market Committee that were construed as dovish. This led to ideas that Bernanke might signal, during a speech Friday at a Fed symposium in Jackson Hole, Wyo., that more easing is imminent.
Bernanke wasn’t specific but offered enough clues to keep the bulls hopeful. Equities also benefitted, while the euro hit a $1.2638 high that was its strongest level against the U.S. dollar since the beginning of July.
The Fed chairman defended the past two rounds of quantitative easing, in which the central bank buys long-term Treasury securities in an effort to push down long-term yields. He said the benefits outweighed the costs. Further, Bernanke lamented the weak state of the job market and said policy-makers stand ready to act as needed. . .View Full Article