Gold futures rose for a second straight day on Thursday, getting a lift from dovish Federal Reserve minutes and as sliding global stock markets increased the metal’s safe-haven appeal.
Gold for December delivery GCZ5, +0.97% picked up $9, or 0.8%, to $1,136.90 an ounce, building on an $11 rise from Wednesday.
“The old floor at $1,131.85 has been paid scant regard and this suggests that the bulls are really pushing this one now,” said Richard Perry, market analyst at Hantec Markets, in a note.
“For now, I would run long positions with a tight stop, though as the temptation for profit-taking may harm the move... I still expect this rally to only be short-lived and the sellers will resume control in due course, but for now the move is strong,” he added.
Thursday’s move came on the back of minutes from the Federal Open Market Committee’s latest meeting, which showed some policy makers felt inflation was still too low to justify an interest-rate hike. This dovish assessment hampered the dollar, which erased all of its gains from the last three sessions after the release of the minutes.
The minutes came out after gold prices settled for the Wednesday session. Commodities have been pressured by rate-hike expectations, as higher interest rates increase the cost of storing commodities, making them less attractive to investors.
On Thursday, gold futures were also lifted by a continued selloff in global equity markets, as it increased the safe-haven demand for the metal. The Shanghai Composite Index SHCOMP, -3.42% closed 3.4% lower, European stock markets SXXP, -1.15% were lower almost across the board, and U.S. stock futures traded in the red.
In other metals trading on Thursday, high-grade copper for September delivery HGU5, +1.34% rose 1 cent, or 0.6%, to $2.29 a pound, rebounding slightly from a more than six-year low. Palladium for the same month PAU5, +0.93% added $8.35, or 1.4%, to $618.10 an ounce, while October platinum PLV5, +0.62% gained $6.30, or 0.6%, to $1,019.40.
