By Nick Godt, MarketWatch
NEW YORK (MarketWatch) — Gold futures jumped to a new record on Tuesday, after the Bank of Japan cut its official lending rate for the first time in nearly two years.
Gold for December delivery (GCZ10 1,332, +15.60, +1.19%) rose $16, or 1.2%, to $1,332.70 an ounce, after rising as high as $1,333.80.
The Bank of Japan’s move surprised markets and, alongside expectations the Federal Reserve will make a similar move to provide further monetary stimulus, supported gold, said analysts at GoldCore in a note.
The yen slumped 0.6% against the euro. But the dollar remained under pressure, given expectations that it’s now the Fed’s turn to soon embark on further easing of its own.
Weakening currencies tend to boost gold’s appeal. The dollar, especially, impacts dollar-denominated commodities including gold.
The U.S. unit was down 0.5% against the yen and the dollar index (DXY 77.99, -0.45, -0.58%) , which measures it against a basket of six major currencies was down 0.7%.
On Monday, gold pulled back slightly as renewed signs of potential trouble in the European Union boosted the dollar.
U.S. investors are now waiting for the September service-sector index from the Institute of Supply Management, due at a 10 a.m. Eastern.
