Gold Erases Loss as N.Y. Factory Slump Signals More Fed Stimulus
bloomberg.com
Gold futures erased losses after a report showed manufacturing in the New York area contracted more than expected, bolstering prospects for expanded U.S. monetary stimulus from the Federal Reserve.
The Federal Reserve Bank of New York’s general economic index dropped to minus 8.1, wider than the minus 1 median forecast in a Bloomberg survey of economists. The central bank pledged last week to buy $45 billion a month of Treasury securities starting in January, expanding its asset-purchase program, and linked the outlook for its main interest rate to unemployment and inflation.
“We’re seeing a knee-jerk reaction to the factory data,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “The thinking is that this lays the groundwork for even more Fed action.”
Gold futures for February delivery were little changed at $1,697.70 an ounce at 9:18 a.m. on the Comex in New York. Earlier, the metal fell as much as 0.6 percent as strength in the dollar damped demand for alternative investments.
Silver futures for March delivery gained 0.3 percent to $32.395 an ounce on the Comex.
Read More: bloomberg.com
2012-12-17 19:41:31
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