Gold inches up after biggest weekly fall in two years

Reuters, (24/6) -- Gold edged higher on Monday after a tumultuous week that saw prices drop the most in nearly two years on fears of an early end to the Federal Reserve's bond purchases and a cash crunch in China. Spot gold gained 0.07 percent to $1,297.66 an ounce by 0018 GMT. It rose over 1 percent on Friday but recorded its worst weekly performance - down 7 percent - since September 2011. Comex gold rose about $5 to $1,297.30. Markets were roiled last week after Federal Reserve Chairman Ben Bernanke laid out a strategy for the U.S. central bank to start scaling back its $85 billion monthly bond buying program. St. Louis Federal Reserve Bank President James Bullard on Friday said neither the central bank's own economic growth forecasts nor its expectations for continued weak inflation supported a decision to dial back bond purchases. China's central bank faced down the country's cash-hungry banks on Friday, letting interest rates again spike to extraordinary levels of some 25 percent for some banks as it stepped up the pressure to contain rampant informal lending. Hedge funds and money managers slashed their bullish bets in gold futures and options for a second consecutive week to the lowest level in a month, a report by the Commodity Futures Trading Commission showed on Friday. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.54 percent to 989.94 tonnes on Friday.

Written by: Kontak Perkasa Futures

PT.Kontak Perkasa Futures, Updated at: 10:28 AM