Gold flirts with US$1,900 on talk of tapering amid inflationary pressures

GOLD is set to close the week around US$1,900 an ounce, after prices spent most of the week hovering around the formidable psychological barrier as investors searched for clues on expectations of inflation.

Benchmark gold futures for August delivery, which had failed to break above US$1,900 last week, sailed past to settle above US$1,900 for the first time in four and half months.

Signs of inflationary price pressures that gave investors the impetus to push gold higher came from Japan's April Producers Price Index which rose higher than expectations and showed the largest increase in 7 months. Gold prices climbed to a high of US$1,915.6 with technical buying adding to gains after prices broke through resistance.