Gold headed for the longest rally since January as signs of slowdown in the U.S. fueled expectations that the Federal Reserve will take further steps to spur growth, boosting the appeal of the metal as an inflation hedge.
Retail sales in the U.S. fell 0.2 percent in May, dropping for a second month, Commerce Department figures showed today in Washington. Bullion surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing. Prices jumped 1.6 percent in the past three sessions.
“Gold is rising on expectations that the Fed will announce further easing measures,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview.
Gold futures for August delivery rose 0.4 percent to $1,619.80 an ounce at 9:18 a.m. on the Comex in New York. A close at that level would be the fourth straight gain, the longest rally since Jan. 5
Fed Bank of Chicago President Charles Evans, speaking yesterday before the central bank’s two-day policy-setting meeting that starts June 19, said he would support moves to generate faster job growth.
Silver futures for July delivery slid 0.1 percent to $28.915 an ounce in New York.