Gold soars after Bernanke comments

Gold futures soared during the early part of Thursday’s Asian after getting a boost from supportive comments made by Federal Reserve Chairman Ben Bernanke following the close of U.S. markets Wednesday. 

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery soared 2.79% to USD1,282.25 per troy ounce in Asian trading after settling up 0.50% at USD1,252.15 a troy ounce in U.S. trading on Wednesday. 

Gold has taken out resistance at USD1,266.55, the high from July 2, which could turn into new support. New resistance can be seen at USD1,300 per ounce. 

After the close U.S. markets, Bernanke delivered comments that sent U.S. stock futures and gold soaring while sending the U.S. Dollar Index plunging. In those remarks, Bernanke said the Fed’s accommodative monetary policy is needed over the near-term, quelling speculation that the central bank could begin tapering its USD85 billion-per-month easing program as soon as September. 

Stimulus efforts weaken the dollar to spur recovery, making gold a nice hedge in the process. While data from the U.S. labor market, manufacturing sector, housing industry and other sectors of the economy have come in better than expected recently, Bernanke noted the U.S. unemployment rate of 7.6% may belie the job market’s actual strength, indicating that last week’s stronger-than-expected June jobs report did not factor into his comments. 

In June, Bernanke roiled financial markets by saying the U.S. economy was gaining strength, which some traders took to mean the end of easing was imminent. That contributed to one of gold’s worst quarterly performances in decades. 

Elsewhere, Comex silver for September delivery surged 3.5% to USD19.835 per ounce while copper for September delivery jumped 1.88% to USD3.145 per ounce.