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DJ PRECIOUS METALS: Silver 32.99, Gold 1692.20, Continues Rally, Focus On Bernanke
Mar 27, 2012 By Tatyana Shumsky Of DOW JONES NEWSWIRES

--Comex April gold up 0.6% at $1,695.40/oz
--Bernanke comments continue to lure buyers to gold
--Stronger dollar tempers gold's climb

NEW YORK (Dow Jones)--Gold futures edged higher Tuesday as investors continued to flock to the market on the back of Federal Reserve Chairman Ben Bernanke's comments about the need for low interest rates, though gold's gains were hampered by a stronger dollar.

The most actively traded contract, for April delivery, was recently up $9.80, or 0.6%, at $1,695.40 a troy ounce on the Comex division of the New York Mercantile Exchange.

Gold futures bounced higher for a second day as traders continued to cheer Bernanke's comments, made a day earlier. The Fed Chairman signalled resolve on keeping interest rates low, saying that despite recent improvements the labor market was still "far from normal" and the economic recovery required such support from monetary policy.

Gold bugs also got a boost from hints that a third round of monetary stimulus, known as QE3, remained a possibility.

"Bernanke's language seemed to suggest that in addition to low rates, QE3 which was perceived to be 'off the table' not too long ago, was now if not exactly back on the table, perhaps lingering on its edges," Edward Meir, senior commodity analyst with INTL FCStone, said in a note to clients.

Gold prices had roared to record levels after the Federal Reserve embarked on its QE2 program in October 2010. At the time, concerns that these measures would erode the value of the dollar and spark inflation down the road triggered a rush to the perceived safety of gold. The precious metal is widely considered a hedge against inflation and a better store of value than paper currencies.

A stronger dollar tapped the brakes on gold's rally Tuesday, however. Gold is priced in dollars and tends to appear more expensive to investors using foreign currencies when the greenback rallies, sapping their demand for the precious metal.

--By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; [e-mail]
(END) Dow Jones Newswires
03-27-12 1008ET

http://news.tradingcharts.com/futures/3/4/176026043.html