Inflation Hedge Appeal

Gold came under pressure on Monday`s early trading after the results of French and Greek elections raised worries the euro area would not be able to jolt out of the debt crisis. The shiny metal rose on Friday after the U.S. jobs report added to speculations the Fed will add to stimulus to bolster recovery, thereby enhancing demand on gold as an inflation hedge. However, gold showed decline today after the win of the Socialist party candidate in the French Presidential elections, noting his intention to lower austerity and reinforce growth which is against the German-led austerity measures. Hollande said after his wining in the elections “austerity is not inevitable,” raising concerns that there would be a conflict between the euro area`s second biggest economy and other euro area ...

(Reuters) - Gold inched up to a two-week high on Tuesday, supported by weakness in the dollar after latest data indicated the U.S. economic recovery might be losing steam. Though the disappointing data may fuel expectations that the U.S. Federal Reserve might launch more quantitative easing, the top two Fed officials both said they saw no need for further easing but also said they do not believe the Fed should quickly move to raise rates. Bullion ended April in the red for the third consecutive month after data showed improvement in the U.S. economy and the Fed's stance became less dovish. More monetary easing raises inflation pressure and burnishes gold's appeal as a hedge against rising prices. "The market has been let down a few times by the Fed, but gold should benefit as the Fed is ...

Asian shares fell and U.S. stock futures pointed lower on Monday in holiday-thinned trade after a sharp slowdown in U.S. jobs growth raised concerns about the strength of the world's largest economy. Oil, which has climbed nearly $20 this year on worries that a standoff between Tehran and the West would escalate and disrupt oil exports from the Middle East, dropped more than a dollar after Tehran agreed to resume talks on its nuclear program. Brent crude was down $1.19 a barrel to $122.24 by 1110 GMT after slipping below $122 earlier in the day. U.S. oil traded $1.46 a barrel lower at $101.85. "The talks are good news. They are going to ease some stress from the oil market but not enough to bring oil below its current trading range," said Ken Hasegawa, a commodity derivatives manager at ...

(Reuters) - Gold edged up on Thursday after two straight days of deep losses, but gains were capped as receding hopes of further U.S. monetary stimulus took the sheen off bullion's appeal as a hedge against inflation. Bullion lost more than 3 percent over the past two days after the U.S. Federal Reserve released minutes from its last policy meeting which showed policy makers were less inclined to launch more monetary stimulus as the economic outlook gradually improves. Hopes for more money-printing by the Fed had buoyed spot gold prices to $1,790.30 in February, the highest level since last November. "The world in 2011 was all about QE (quantitative easing) and more potential QE. Now the environment is a little different - the U.S. economy is back on better footing ...

(Reuters) - Gold edged up on Thursday after two straight days of deep losses, but investors remain wary of gold's fortune after the U.S. central bank dashed hopes for more monetary stimulus, while a weakened euro also weighs on sentiment. Bullion lost more than 3 percent over the past two days after the U.S. Federal Reserve released minutes from its last policy meeting which showed policy makers were less inclined to launch more monetary stimulus as the economic outlook gradually improves. The sentiment dimmed gold's appeal as an inflation hedge which had attracted investors who expected more money-printing by the Fed to buoy the economy. "The world in 2011 was all about QE (quantitative easing) and more potential QE. Now the environment is a little different - the U.S. economy is back ...

(Reuters) - Gold edged lower on Wednesday, extending a nearly 2 percent tumble in the previous session, as the minutes of the U.S. Federal Reserve's last policy meeting showed diminishing appetite for further monetary stimulus. Expectations of another round of quantitative easing had boosted gold's appeal as a hedge against inflation and pushed prices to $1,790.30 in February, the highest level since last November. Policymakers at the U.S. central bank believed that the gradually improving economy has lessened the need for more monetary easing, even though they remained cautious about a broad pickup in economic activities. The minutes came just a week after Fed Chairman Ben Bernanke hinted at the possibility of further stimulus, which drove stocks and commodities higher and cut the ...

(Reuters) - The euro started the second quarter of 2012 lower against the dollar and yen on Monday as weak European manufacturing data reflected a growing divide between the economic outlooks of the United States and the euro zone. Manufacturing strengthened in the United States and China in March. It contracted in the euro zone for the eighth straight month. Reports from the euro zone, which is teetering on the brink of recession, showed the downturn in the region's peripheral economies has spread to core countries Germany and France, according to purchasing managers' indexes (PMIs) for March. The outlook was grim as new orders fell across the region for the 10th month. The weak data should keep European Central Bank monetary policy accommodative. At the same time, the U.S. Federal ...

(Reuters) - Gold edged lower on Tuesday as a brightened U.S. economic outlook dented its safe-haven appeal, while a buoyant equity market also prompted investors to take money out of bullion. The expectations of further monetary easing worldwide amid a sluggish growth outlook had boosted investment in gold as a hedge against inflation, sending cash gold prices up as much as 14 percent this year to near $1,800 an ounce. But the flight to safety has started to lose its appeal with upbeat U.S. data in recent months increasing investor confidence in the recovery of the world's largest economy. "Investors are looking at other investment options, as they are less concerned about economic growth and more wanting to hop on the equity rally, which clearly works against some of the reasons why ...

(Reuters) - Gold edged up on Friday, rising in tandem with other commodities and equities, after a lower-then-expected inflation rate out of China suggested more monetary easing could be on the way, while a rebound in the dollar kept gains in check. A string of data showed China's factory output, investment and retail sales slowed in February, while the inflation rate staged an unexpectedly sharp fall to a 20-month low, giving policymakers room to further loosen monetary policy to support slowing growth. The prospect of ample cash in the market offset the appeal of gold as an inflation hedge in the short term, analysts said. "A lower headline inflation number means that the central bank can continue to be very accommodative, which means printing more money," said Jeremy Friesen, ...