Gold, little changed in London, may rise after a member of the Federal Reserve said the bank could pare back stimulus measures and Europe?s governments wrestled with the sovereign-debt crisis, boosting demand for a haven.
Federal Reserve Bank of Philadelphia President Charles Plosser said yesterday that the U.S. central bank may have to reassess asset-purchase plans or the policy could ?backfire.? European Central Bank council member Axel Weber said today that optimism about Europe?s debt crisis is ?premature? and that it?s too early to say the region?s issues have been addressed.
?The Fed will most likely stay on its path of easy monetary policy for longer, rather than risk derailing the recovery with a return to policy normalization prematurely,? Edel Tully, an analyst at UBS AG in London, said in a report today. ?Such an environment remains positive for gold, as does rising European debt concerns.?
Spot gold rose $1.82, or 0.1 percent, to $1,383.35 an ounce at 10:41 a.m. in London. Gold futures for February delivery on the Comex in New York were little changed at $1,382.60 an ounce after two days of gains on concerns that Europe?s debt crisis may widen.
Fed policy makers signaled last month they?ll probably push ahead with a second round of asset purchases until the recovery strengthens and many of the 15 million unemployed Americans find work, according to minutes of their Dec. 14 meeting.
Plosser said in a speech in Philadelphia that the bank may have to reassess that plan to buy $600 billion in bonds. ?The aggressiveness of our accommodative policy may soon backfire on us if we don?t begin to gradually reverse course,? he said.
Job Openings Fall
Job openings in the U.S. fell in November from the highest level in two years. The number of positions waiting to be filled decreased by 80,000 to 3.25 million, the Labor Department said yesterday in Washington.
There may be ?some trepidation around the prospects for the U.S. economy,? Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said today. Spot gold reached a record $1,431.25 an ounce on Dec. 7.
Japan said yesterday it plans to buy bonds issued by Europe?s financial-aid funds, joining China in assisting the region. The euro rose 0.3 percent to $1.3018 at 8:26 a.m. in London. It was at 108.06 yen from 107.99 yen.
?The market focus is clearly on the problems within the euro zone,? said Yousuke Hosokawa, a senior currency dealer in Tokyo at Chuo Mitsui Trust & Banking Co., a unit of Japan?s seventh-largest bank.
Palladium for immediate delivery gained 2.4 percent to $804.15 an ounce, while cash platinum rose 1.2 percent to $1,791.50 an ounce. Both metals are used in pollution-control devices as well as jewelry.
Immediate-delivery silver rose 0.4 percent to $29.6475 an ounce.
To contact the reporter on this story: Wendy Pugh in Melbourne at wpugh@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
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