USA — Gold was little changed on Friday, holding near a 4-1/2 month high hit earlier last week on hopes the US Federal Reserve Chairman Ben Bernanke would hint at more measures to stimulate the economy at a central bankers meeting later.
Bullion, seen as a hedge against inflation as a result of rampant cash-printing, was headed for an almost 3% gain this month, its third straight month of gains.
“I think the macro situation doesn’t seem to be improving and also we are getting closer to the fiscal cliff for the US,” said Phillip Futures analyst Lynette Tan, referring to massive US government spending cuts and tax hikes due next year.
“I expect gold investors to have this in mind, and their interest in gold as an alternative investment will still hold. If Bernanke disappoints, then we could see a slight sell off but I am not looking at gold to fall violently. Support is at about US$1 620.”
Spot gold was little changed at US$1 654,09 an ounce by 0300 GMT, within sight of the 4-1/2 month high of US$1 676,45 hit on Monday. US gold futures were also little changed at US$1 656,80 an ounce.
Previous rounds of asset purchases by the Fed to drive down interest rates and stimulate the economy weakened the US dollar, boosted global stock markets and prompted investors to turn to gold as a hedge against inflation.
Gold rallied to around US$1 790 in February, the highest level so far in 2012, after the Fed at the time said it would keep interest rates near zero until at least the end of 2014.