Gold futures rose in New York, capping the fourth straight weekly gain, on speculation that the US dollar will weaken, boosting the appeal of the precious metal as an alternative asset.
The US dollar fell against the euro after Federal Reserve chairman Ben Bernanke said the US central bank ‘‘will do all it can’’ to ensure a recovery.
Gold has gained 13 per cent this year, touching a record $US1266.50 an ounce in June.
‘‘If the markets are going to see more quantitative easing, that’s going to weaken the dollar and boost gold prices,’’ said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago.
Gold futures for December delivery rose 20 cents to settle at $US1237.90 an ounce on the Comex in New York.
The precious metal gained 0.7 per cent this week.
The Fed has kept the main interest rate between zero and 0.25 per cent since December 2008 to revive the economy. The central bank also has purchased $US1.25 trillion in mortgage- backed securities in an effort to push down mortgage rates to support housing.
Gold prices fluctuated between gains and losses during Bernanke’s opening remarks to central bankers from around the world at the Kansas City Fed’s annual monetary symposium in Jackson Hole, Wyoming.
‘‘Investors don’t have a firm grasp of what’s going on with the economy and that breeds confusion and supports gold,’’ said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago.
Falling asset prices may hurt gold’s advance in the short term, some analysts said. Before today, the Standard & Poor’s 500 Index fell 6.1 per cent this year and the Reuters/Jefferies CRB Index of 19 commodities declined 6.8 per cent.
‘‘You still have the overhang of a deflationary scenario and that’s going to cap gold’s rally,’’ said Frank McGhee, the head dealer at Integrated Brokerage Services.
Earlier, gold rose as much as 0.5 per cent after the government said the US economy grew at a 1.6 per cent pace in the second quarter, more than the 1.4 per cent median forecast of economists.
The expansion was lower than last month’s government estimate of 2.4 per cent.
US economic data released this month on employment, manufacturing and housing have shown that the pace of growth is easing.
Bernanke said growth during the past year has been ‘‘too slow.’’
‘‘The economic data has deteriorated,’’ said Michael Pento, a senior economist at Euro Pacific Capital.
‘‘That has caused gold investors to prepare for the next round of fiscal and monetary stimulus from DC.’’
Silver futures for December delivery rose 5.2 cents, or 0.3 per cent, to $US19.074 an ounce on the Comex. The metal rose 5.7 per cent this week, the biggest weekly increase since early April, as some investors purchased the metal as a cheaper alternative to gold.
Platinum futures for October delivery fell $US2.90, or 0.2 per cent, to $US1537 an ounce on the New York Mercantile Exchange, up 1.5 per cent for the week. Palladium futures for December delivery rose 35 cents to $US504.65 an ounce.
