Gold rockets past $1,330 for biggest one-day gain in 13 months - Wealth Managers

Fed chief Ben Bernanke's renewed accommodative stance "has a put a bid under gold"

"Gold settled at $1,336 on Monday, surging nearly 3 percent as a technical breakout above $1,300 an ounce triggered a rush by funds and speculators to buy back their bearish bets,"Reuters reported.

"The metal is on track to post its biggest three-day rally in over a year, partly boosted by heavy short-covering as futures investors rolled over to December from August deliveries ahead of first-notice day next week." 
Gold bears rush to cover shorts
Data from the Commodity Futures Trading Commission for the week ended July 16 showed a decline in gold gross speculative short positions from an all-time high in the previous week.

"Further short covering for gold may provide a near-term boost for prices," HSBC analyst James Steel told clients on Friday.
Fed chief puts "bid under gold"
Federal Reserve chief Ben Bernanke's testimony before two congressional panels last week continues to reverberate through the gold market, particularly his revelation that "the economy would tank" if the Fed reduces its stimulus.

"We are seeing some support for gold as Bernanke's statements tell us that the Fed wants to see a visible improvement in economic conditions before they begin tapering," Michael Cuggino of Permanent Portfolio Family of Funds Inc. told Bloomberg. "The longer-term reasons for owning gold, like capital preservation, remain as easy money will continue to flow into the system."

"Bernanke's statement has a put a bid under gold," Bart Melek of TD Securities confirmed. "Also, the weak housing data confirms the fact that stimulus is here to stay for some time." 
Home sales post largest drop this year
As Zero Hedge noted: "Existing home sales dropped 1.2% month-over-month -- the biggest drop in 2013 -- against expectations for a 1.5% rise. Critically though, this is for a period that reflects closings with mortgage rates from the April/May period -- before the spike in rates really accelerated. Inventory rose once again to 5.2 months of supply (vs 5.0 in May) and you know the realtors are starting to get concerned when even the ever-optimistic chief economist of the NAR is forced to admit that 'stunningly' "higher mortgage rates will bite." With mortage applications having collapsed since May, we can only imagine the state of home sales (especially as we see all-cash buyers falling) for July."
Inflationary policies green-lighted in Asia
What were some of gold's other bullish drivers? "The People's Bank of China removed control of interest rates on loans offered by the nation's financial institutions," TheStreet reported. "Seems like anybody can go out and get smaller denominated loans, and what that's going to do is that's going to start pumping some money back into the [Chinese] system," Phil Streible of RJO Futures said, calling the move inflationary and therefore gold-bullish. 

And elsewhere in Asia, "gold prices marched higher Monday as a sweeping victory for Japan's ruling Liberal Democratic Party in upper house elections over the weekend was heralded as a vote of approval for the party's economic reforms," The Wall Street Journal reported. "Prime Minister Shinzo Abe's focus on loose monetary policies have been aimed at sparking growth in the world's third-largest economy." 

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