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Gold 1414.60 - Bernanke Comments Push Gold Near Record High

NEW YORK, Dec 06, 2010 (Dow Jones Commodities News via Comtex) -- By Tatyana Shumsky Of DOW JONES NEWSWIRES

Comex gold futures open near record levels Monday as inflation concerns in the U.S. and ongoing worries about Europe lure investor funds to the safe harbor asset.

The most actively traded contract, for February delivery, was recently trading up 0.7%, or $9.50, at $1,415.70 per troy ounce on the Comex division of the New York Mercantile Exchange.

Gold prices rose on renewed inflation concerns following Federal Reserve Chairman Ben Bernake's comments to CBS's "60 Minutes" Sunday. The Chairman said the Fed might increase its $600 billion monetary stimulus program if necessary to prevent a so-called double-dip recession.

"More liquidity means a further boost for precious metals, especially gold, as well as a weaker dollar," Walter de Wet, head of commodity strategy at Standard Bank wrote in a note to clients.

The initial Fed stimulus, announced early November, sparked investor concern about soaring long-term inflation and protracted dollar weakness and helped gold prices rally to record highs. Gold is often viewed as a store of value and an inflation hedge, as well as an alternative currency.

These fears re-emerged Monday with the possibility of a larger monetary stimulus.

Gold's appeal as a store of value won out despite a stronger dollar. The euro was recently at $1.3275, from $1.3414 late Friday.

Dollar-denominated gold appears more expensive to investors using foreign currencies when the greenback strengthens. But investors were more concerned about protecting their asset value and hedging their exposure to currency markets.

Gold prices are also seeing support from physically-backed exchange-traded funds. Gold held by ETFs rose to a fresh record high of 2,151.3 metric tons, according to Barclays Capital.

"Longer-term and shorter-term investor interest in gold remains elevated," Barclays Capital precious metals analyst Suki Copper wrote in a note to clients.

-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; [e-mail]

(END) Dow Jones Newswires

12-06-10 0943ET

http://news.tradingcharts.com/futures/6/6/149747966.html