Gold prices remain high on hopes of stimulus: GEPL

Bullions

Precious metals edged higher today, paring losses from the previous session, with investors awaiting a key German ruling on the euro zone's bailout fund and a U.S.Federal Reserve decision on possible measures to stimulate the economy. The chances of a QE3 announcement this week have jumped after disappointing U.S. employment data last Friday, sending spot gold to above $1,740 for the first time since end of February. A German constitutional court will rule on Wednesday whether Germany can contribute to the European rescue fund, which plays a crucial role in the European Central Bank's plan to fight the region's debt crisis. Scrap continued to flow into Asia's physical gold market as prices remained buoyed by market expectations for more stimulus measures.

Base-Metals

Copper rose to its highest level in four months on Monday, driven by the increased likelihood of more economic stimulus in China and the United States, two of the world's top consumers of the metal. Building on Friday's nearly 4 percent surge, copper prices pushed higher in relatively stronger volumes, after weaker import and industrial production data over the weekend from China reinforced expectations that Beijing will soon adjust policies to lift an economy mired in its softest period of growth in three years. In the United States, disappointing employment numbers last week increased the chances that the Federal Reserve will move this week to launch another round of bond buybacks, known as quantitative easing (QE), to stimulate the world's largest economy, according to a Reuter’s poll.

Energy 

Crude prices edged up despite weak data from China as investors were hoping for stimulus plans from the Federal Reserve. In the earlier trading, crude prices were pressured by the weak trade data from the world second largest oil consumer of China. Statistics released on Monday showed that Chinese imports fell 2.6 percent year on year in August, far below the expectations of a 3. 5 percent rise. Meanwhile, exports grew 2.7 percent, also missing the forecasts of a 3 percent increase. But investors were hoping that more and more economic darkening signs will trigger another round of quantitative easing from the Fed. In the Middle East, Saudi Oil Minister Ali al-Naimi said on Monday Saudi Arabia was concerned about the high oil prices and would take necessary steps to increase outputs. But he thought the rising prices were "simply not supported by market fundamentals."

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