MW: Gold reverses and moves up as bargain hunters step in
By Claudia Assis and April H. Lee, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold staged a comeback Thursday, posting gains after bottom fishers came in to snap up the metal.
Gold futures for August delivery added $6.80, or 0.6%, to $1,198.90 an ounce in electronic trade on the New York Mercantile Exchange. Prices had hit an intraday low of $1,180.70 an ounce.
The precious metal has toggled within a close range this week, unable to rise above $1,200 for the past four sessions. Futures ended flat on Wednesday after closing 0.8% higher on Tuesday.
Gold had opened lower after Federal Reserve Chairman Ben Bernanke's dovish testimony on Wednesday, while investors awaited the results of European banks' stress tests at the end of the week.
"The big picture is still quite volatile," said James Moore, an analyst with Thebulliondesk.com in the U.K. Commodities in general are doing well because "investors have no real choice where they can park their money," enhancing commodities' tangible appeal, he added.
Helping matters along, a trade group said Thursday that sales of existing homes in the U.S. fell 5.1% in June, a smaller drop than economists anticipated.
September silver rose 36 cents, or 2%, to $18.16 an ounce.
September copper added 9 cents, or 2.8%, to $3.18 a pound.
Copper rose 3% on Wednesday, its biggest one-day rise since mid-June as U.S. stocks continued to rise. Many investors view the stock market as a barometer of economic conditions and, by extension, of demand for copper, heavily used in industrial applications and construction.
Fears of inflation were quieted after Bernanke's testimony to the Senate Banking Committee.
"My colleagues on the FOMC and I expect continued moderate growth, a gradual decline in the unemployment rate and subdued inflation over the next several years," Bernanke said, while also noting deflation was not a near-term risk for the U.S. Read more about Bernanke's testimony.
Pricing pressure could also prevail if European banks' stress tests yield positive results, which would remove some of gold's safe-haven support. The stress-test results are due to be reported on Friday. Read more about the stress tests.
Shares of SPDR Gold Trust (GLD 117.09, +1.24, +1.07%) , the largest exchange-traded fund backed by gold, traded 1.1% higher.
