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Gold set for best week in two months on US stimulus hopes

Source : REUTERS
Last Updated: Fri, Oct 18, 2013 03:16 hrs
A saleswoman displays a gold necklace at a jewellery shop in Agartala

Gold, trading near one-week highs on Friday, was headed for its best weekly gain in two months on hopes that uncertainties in Washington would delay a stimulus tapering after U.S. lawmakers reached only a temporary budget deal.

FUNDAMENTALS

Spot gold eased 0.2 percent to $1,316.31 an ounce by 0015 GMT, after gaining 3 percent in the previous session.

Gold has added 3.5 percent for the week, largely on Thursday's gains.

After Congress ended a 16-day government shutdown and stepped back from the edge of an unprecedented debt default, U.S. lawmakers launched an effort on Thursday to resolve budget differences in a less confrontational fashion.

Many feared that lawmakers have set the stage for another standoff in the months to come as the deal reached earlier this week only lasts till early next year.

The Federal Reserve will likely defer any decision to trim its massive bond buys until at least December, two top Fed officials suggested. Economists said the tapering could be delayed until early 2014 as the U.S. recovers from the impact of the government shutdown.

Investment management firm FinEx Group and the Moscow Exchange said they had launched Russia's first gold-backed exchange-traded fund as part of a bid to turn Moscow into an international financial centre.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 3.3 tonnes to 882.23 tonnes on Thursday.

MARKET NEWS

The dollar languished near an eight-month low versus the euro on Friday as investors counted the costs of a two-week U.S. government shutdown.

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