Gold futures on the COMEX Division of the New York Merc bounced back Thursday, buoyed up by concerns over the rising inflationary pressure in Europe, and Silver and platinum both jumped.
The most active gold contract for August delivery added 4, or 0.3%, to 1,542.7.
The European Central Bank kept its Y 2012 inflation forecast unchanged, suggesting the pace of EuroZone interest rate hikes may be slower than previously thought.
The Bank’s chief said “strong vigilance” was warranted to curb inflation in the 17-country EuroZone, in comments widely viewed by market participants as signaling a rate hike later this summer.
“There are strong hints that China and the European Union intend to raise their interest rates,” said Mike Daly, a gold specialist with PFG here in Chicago. “Both central banks are citing very high inflation.”
A trader mentioned that the rising concerns of inflation in Europe offered some strong support to Gold, as Gold is usually bought as an insurance policy against economic chaos and a hedge against inflation.
Meanwhile, higher Crude Oil prices also helped to fuel Gold’s early momentum.
Silver for July delivery surged 80.4c, or 2.2%, to 37.424 oz and Platinum for July delivery added 13.5, or 0.7%, to 1,844.7 oz.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
