Gold moved higher in the Asian trading Thursday, rising more than 1% as dip buying supported prices with market participants waiting for speeches by U.S. President Barack Obama and Federal Reserve Chairman Ben Bernanke for further direction.
The yellow metal, which pulled back by more than $100 in two trading sessions after touching a record high of $1,920.94 a troy ounce on September 6, was also consolidating after the latest correction. At 0615 GMT, spot gold was at $1,841.60/oz, up $25 from its previous close.
Traders said the market is beginning to price in speculation that President Obama may announce a new jobs program could amount to a stimulus of between $300 billion and $400 billion during the coming year.
"People are getting excited about Obama .. and Fed doing something more," said Citigroup analyst David Thurtell, who expects gold to find support around $1,810/oz.
Gold has been volatile in the past few weeks, falling at times by more than $200/oz over a matter of days. The market is likely to remain choppy in the near-term as central banks intervene in the foreign exchange markets and exchange operators hike trading margins in response to increased volatility.
However, the bleak global economic outlook and euro-zone debt problems are likely to support gold in the medium-to-long-term, analysts said.
"We are a long way from saying that the world's woes are over," Thurtell said.
Besides, rising oil prices and a possible stimulus package could push up prices, said Jonathan Barratt, managing director of Commodity Broking Services.
Gold, which is seen as a hedge against inflation could gain, he said. Barratt expects gold to "gravitate and break through the $1,920/oz-area soon."
Amid concerns over structural macro-economic risks in advanced economies, investors have been raising their exposure to hard assets such as gold and silver, Bank of America-Merrill Lynch, said in a report.
At 0615 GMT, spot silver was at $41.86/oz, up 33 cents, while platinum was up $18.30 at $1,833.75/oz and palladium at $752.50/oz, up $5.02 from its previous close.
Traders said platinum and silver are trading more in line with gold than based on fundamental drivers, as they fell in the last two sessions before recovering Thursday.
With the government of Zimbabwe expected to cancel Impala Platinum's operating license due to its failure to comply with the country's Indigenization and Economic Empowerment Act, platinum should have seen bigger gains, they said. Despite the news, platinum lost ground in the last two days while palladium give up much of last week's gains.
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