LONDON: Gold jumped more than three percent in Europe on Wednesday, as a weak dollar and oil’s climb boosted bullion ahead of the US Federal Reserve’s key decision on interest rates, due later in the day.
Spot gold rallied to $767.00 an ounce and was quoted at $760.10/762.60 an ounce at 1255 GMT, up more than 2 percent from $744.30 in late New York trade on Tuesday.
Rises in other commodity markets help boost gold prices. Copper surged nearly 8 percent and lifted other industrial metals higher while oil gained above $65 a barrel, boosted by a surge in global stock markets. European shares were up nearly five percent.
Firmer crude typically benefits gold, which is often bought as a hedge against oil-led inflation. Rising oil prices also tend to boost interest in commodities as a whole.
Platinum was up at $810 an ounce, bouncing from an earlier session low of $755.50 an ounce, versus $809.00 on Tuesday. Buying of the metal for use in catalytic converters accounts for more than half of global platinum demand, and reports of production cutbacks and falling sales among car manufacturers have wiped 65 percent from the metal’s value since March. However, analysts said the fall may have been overdone. Palladium was at $185.50/195.50 from $176, having touched a high of $186 on speculation the sell-off in the metal was overdone. Spot silver was at $9.63/9.73 after rising as high as $9.72 and against $9.16.
Copper climbs: A bounce in copper took other base metals higher on Wednesday, buoyed by rising global equity markets as investors eagerly awaited an expected interest rate cut from the U.S. Federal Reserve later in the session.
Copper for three month delivery on the London Metal Exchange rose to $4,425 a tonne in official trading rings, from $4,130 at the close on Tuesday and compared with a session high of $4,455. Prices of the metal used in power and construction have however, fallen by more than 50 percent since a record high of $8,940 in July. Aluminium hit $2,180 a tonne, its highest in more than one week, but was at $2,160 in official rings, from $2,105 on Tuesday.
The metal used in transport and packaging has come under pressure in recent months, as a slowing economic climate pulled the price down from its all-time high of $3,380 in July 2008. Nickel rose as much as 6.9 percent at $12,800 and was traded at $12,675 in official rings versus $11,970. Lead climbed 6.1 percent to $1,560 but was at $1,540 from $1,470, while zinc rose 7.7 percent to $1,238 before tracking back to $1,220 from $1,150. Tin was at $14,900 versus $14,750. reuters
