Nornickel weighs projects in new top market China
Nornickel executives held talks with potential Chinese partners this month and signed about 10 memorandums of understanding, Bloomberg sources say.
Gold for delivery in December made a dash for $1,800 an ounce in early dealing on Monday, reacting to disappointing manufacturing news out of China which could lead to greater stimulus for the second largest economy in the world and boost gold in the process.
Gold climbed $17 or just shy of 1% from Friday’s close to $1,791.90 an hour into the trading day. The metal touched an-intraday high of $1,794 shortly after the open, but could not hold on to the gains, ending the day little changed.
Gold is still up 15% since hitting 2012 lows below $1,550 in Mid-may and within reach of its February 28 high for the year when it closed just under the psychologically important $1,800 level.
On Friday, the metal closed out the September quarter with its biggest quarterly gain since 2010 as QE3 Infinity – as the open-ended third round of quantitative easing in the US has been dubbed – increases the metal’s allure as an inflation hedge and storer of wealth amid currency depreciation.
Unlike earlier rounds, QE3 is open-ended and the US Federal Reserve under chairman Ben Bernanke announced it would only halt the program if they are satisfied with the recovery in US jobs and economic growth. The Fed also extended its near-zero interest rates until the middle of 2015 and is keeping in place ‘Operation Twist’ first started in September last year.
Martketwatch reports Bernanke on Monday had to defend the QE3 decision stressing that the US central bank has not abandoned its stated mandate to maintain price stability in the country:
“We expect inflation to remain low for the foreseeable future,” he said.
“The Federal Reserve’s price stability record is excellent and we are fully committed to maintaining it,” he said.
Bernanke stressed that the Fed’s pledge to keep rates low until mid-2015 was not a forecast of a weak economy over the next three years.
Instead, the message is “as long as price stability is preserved, we will take care not to raise rates prematurely,” he said.
The first two round of quantitative easing have been a massive boon for gold. The price of gold had almost doubled on the back of QE1 which kicked off in December 2008 and QE2 which was first mooted in August 2010.
