Gold rebounds over expectation of ease monetary policy

Xinhua, August 31, 2011

Gold futures on the COMEX Division of the New York Mercantile Exchange rebound on Tuesday. [CFP]

Gold futures on the COMEX Division of the New York Mercantile Exchange rebounded on Tuesday, regaining the 1,800-dollar mark, as investors expected that the Federal Reserve would further ease the monetary policy to boost the economy.

The most active gold contract for December delivery rose 38.4 U. S. dollars, or 2.1 percent, to 1,829.8 dollars per ounce.

Market analysts said that investors expected that the economic weakness in the U.S. would prompt the Federal Reserve to provide an additional boost to the economy, after the release of Fed meeting minutes on Tuesday.

The options with the most support were more asset purchases and a "few" favored cutting the interest on excess reserves the Fed pays to banks, according to the minutes.

Federal Reserve Chairman Ben Bernanke did not give any indication at the annual meeting at Jackson Hole that the Fed would offer any additional policy measures, such as more quantitative easing, leaving instead the decision to the two-day meeting slated for Sept. 20-21.

Gold has rallied 12 percent so far this month, buoyed by a series of debt problems in the western world.

Silver for September delivery also hiked 86.3 U.S. cents, or 2. 1 percent, to 41.464 dollars per ounce. Platinum for October delivery gained 28.1 dollars, or 1.5 percent, to 1853.1 dollars per ounce.