MW: Gold futures rise 3%, as other metals also gain
NEW YORK (MarketWatch) -- Gold futures rose 3% early Wednesday, with most other metals also posting gains, as the U.S. dollar traded mixed against other major currencies.
Gold for February delivery surged $23.30, or 3%, to $866.00 an ounce in electronic trading on Globex.
Earlier, the contract hit an intraday high of $868.40 an ounce.
On Tuesday, gold ended up $6.20, or 0.7%, at $842.70 an ounce on the New York Mercantile Exchange.
After the close of gold trading Tuesday, the Federal Reserve established its target range for the federal funds rate of 0 to 0.25%, effectively cutting its key rate for overnight lending to banks by between 0.75% and 1%.
"The Federal Reserve has embraced 'Helicopter Bernanke's' inflate or die massive reserve and money creation academic theories in an attempt to prevent deflation," said Mark O'Byrne, executive director at Gold and Silver Investments Ltd., referring to Fed Chairman Ben Bernanke.
"Markets realize that this will lead to a lower dollar and higher gold prices in the medium and long term," O'Byrne said in a research note.
In the currency markets, the U.S. dollar was mixed Wednesday against other major currencies, a day after the Federal Reserve decided to cut interest rates to historic lows and expand a program of extraordinary lending and other measures to attempt to lift the U.S. economy out of recession. See Currencies.
The dollar index a measure of the U.S. dollar against a trade-weighted basket of six currencies, traded at 79.71, down from 79.921 in North American activity late Tuesday.
Also on the Globex, March silver futures rose 52 cents, or 5%, to $11.22 an ounce, and January platinum futures gained $11.40, or 1.3%, to $860.90 an ounce.
March palladium futures rose $2.95 to $180.50 an ounce, while March copper futures fell 3 cents to $1.35 a pound.
