July 11, 2013 / 12:47 AM / 6 years ago

Gold climbs to 2-1/2 week high on Fed stimulus hopes

SINGAPORE (Reuters) - Gold jumped to its highest in more than two weeks on Thursday after Federal Reserve Chairman Ben Bernanke said the U.S. central bank will continue to pursue an accommodative monetary policy for now to support the economy.

Gold products are displayed for sale at a shop in Hanoi June 5, 2013. REUTERS/Kham/Files

FUNDAMENTALS

* Spot gold was up 1.8 percent to $1,285.76 an ounce by 0024 GMT, extending gains into a fourth day. It earlier climbed to $1,289.35 - its highest since June 24.

* U.S. gold jumped as much as 3.3 percent to a two- and-a-half week high of $1,288.3. Spot silver also rose 3 percent to $19.93 - its highest in one and a half weeks.

* Bernanke on Wednesday said a highly accommodative policy was needed for the foreseeable future as inflation remains low and the employment rate may be overstating the health of the labour market.

* Minutes from the June Fed policy meeting showed that about half of the bank’s policymakers felt the stimulus programme should be brought to a halt by year end, but many wanted reassurance the U.S. jobs recovery was on solid ground before any policy retreat.

* The Fed has been buying $85 billion a month in U.S. government and mortgage-related debt.

* Bullion, which is down about 25 percent this year, has taken a hit after Bernanke said in May and June that the Fed could begin tapering the bond purchases later this year. Wednesday’s comments suggest that the bond purchases could last longer.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.07 percent to 939.08 tonnes on Wednesday.

* India’s jewellers could continue a voluntary ban on sales of gold coins and bars for six months, in support of the government’s efforts to curb imports, a trade body said in a statement on Wednesday.

MARKET NEWS

* The dollar slumped in thin early Asian trade after dovish comments from Bernanke forced markets to cut bullish bets on the greenback as they reassessed when the U.S. central bank was likely to start withdrawing stimulus.

Reporting by A. Ananthalakshmi; Editing by Ed Davies

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