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Gold climbs for third session on US stimulus outlook

Published: 15th November 2013 10:32 AM  |   Last Updated: 15th November 2013 10:32 AM   |  A+A-

* Gold gains nearly 2 percent in three days, still below $1,300

* Fed chair nominee Yellen says will continue to support economy

* Charts point to further gains in gold

Gold rose for a third straight session on Friday after assurances from the likely new Federal Reserve chief that the U.S. central bank would continue its easy monetary policy for a while.

The prospect of the Fed's bullion-friendly bond purchases being maintained for some time helped gold recover from a four-week low hit earlier this week and it may now end a two-week losing streak.

Yellen said on Thursday she would press forward with the central bank's ultra-easy monetary policy until officials were confident a durable economic recovery was in place that could sustain job creation.

Answering questions before the Senate Banking Committee, Yellen robustly defended the Fed's steps to spur economic growth, calling efforts to boost hiring an "imperative" at a hearing into her nomination to become the first woman to lead the U.S. central bank.

"Yellen is looking for a more solid recovery before she can start easing (the stimulus)," said Helen Lau, an analyst at UOB Kay Hian Securities in Hong Kong.

"Markets were looking for a cue from her and they did get reassurances of continued quantitative easing," Lau said, referring to the Fed's bond-buying stimulus measures. "That really lifted one of the major overhangs for gold."

Spot gold rose 0.3 percent to $1,290.46 an ounce by 0223 GMT, bringing the gains over the past three sessions to 1.8 percent. Earlier this week, it hit a three-week low of $1,260.89, but it now looks likely to end the week higher.

Lau expects gold to end the year above $1,300. It has fallen nearly 25 percent this year on fears the Fed would begin slowing its $85 billion monthly bond purchases, which have helped burnish gold's inflation-hedge appeal.

Spot gold is expected to rebound to $1,299 per ounce as it has broken above resistance at $1,285, Reuters technicals analyst Wang Tao said.

PRICES AT 0223 GMT

Metal                              Last       Change    Pct chg     YTD pct chg

                                                                

 Spot gold                  1290.46       3.45         0.27           -22.94

 Spot silver                     20.8         0.06        0.29           -31.31

 Spot platinum            1451.49       8.25        0.57             -5.44

 Spot palladium            739.97       3.75        0.51              6.93

 Comex gold Dec3      1290.2        3.9          0.3              -23.01

 Comex silver Dec3        20.785     0.06       0.3               -31.43

 Euro                    1.3453                                 

 DXY                     81.028                                 

COMEX gold and silver contracts show the most active months



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