Gold makes tentative gains on Fed bond-buying speculation

<p>Gold has made gains in commodities trading as speculation mounts that the Fed will implement more bond-buying.</p>

Gold has made tentative gains in commodities trading this afternoon as speculation mounts that the Federal Reserve (Fed) is going to implement further bond-buying.

The Fed is expected to announce a fresh round of stimulus today to boost the US economy as the central bank's policymaking committee rounds off a two-day meeting.

As such, the aim of asset purchases is to keep long-term interest rates low and encourage individuals and businesses to borrow money to expand and hire, as well as spend more cash.

The Fed's Operation Twist programme – in which the central bank buys longer-term bonds and swaps them for short-term ones – expires before the new year.

Furthermore, the central bank is expected to continue with its open-ended $40 billion (£24.7 billion) a month mortgage-backed securities purchases, which it announced in September 2012.

At 16:00 GMT, the Forex Gold Index (pm fix) rose by 0.4 per cent to $1716.25 per ounce.

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