Domestic precious metals futures rose yesterday on the back of economic indicators that were bad enough to spark hopes of further stimulus from the US central bank.
The most active gold contract on the Shanghai Futures Exchange (SHFE) tacked on 1.65 percent Thursday to close at 332.88 yuan ($52.13) per gram, or $1,621.55 per ounce. The contract, for December delivery, opened 1.29 percent above Wednesday's closing price and climbed steadily over the session.
It tracked the benchmark Comex gold contract for August delivery, which rose 1.4 percent after the Chinese mainland markets closed Wednesday. The Comex gold contract was trading at $1,605.80 per ounce when the SHFE closed Thursday, down 0.14 percent.
Weaker-than-expected UK GDP data and disappointing US new home sales in June prompted more speculation that the US Federal Reserve might soon take steps to support the flagging economy, commodity analysts from the Australian bank ANZ wrote Thursday.
"Talk of Fed action and the fall in the dollar versus the euro helped lift (gold) prices by 1.5 percent Thursday," the note said.
Still, the analysts predicted that any further rise in gold prices would require central bank stimulus.
Speculation about measures from the Fed weakened the US dollar Thursday. The US Dollar Index, which measures the value of the dollar against a basket of currencies, slipped 0.1 percent Thursday. A weaker dollar makes commodities cheaper for holders of other currencies.
