GOLD edged higher today amid a risk rally across many markets as better-than-expected earnings reports helped allay economic fears.
The most actively traded contract, for August delivery, rose $US3.80, or 0.3 per cent, to $US1195.60 an ounce on the Comex division of the New York Mercantile Exchange. Gold's intra-day high of $US1201.20 was the contract's highest price since July 16.
US equities surged today, focusing on earnings reports and euro-zone economic data that suggested economic recovery prospects may not be as bleak as they have seemed in recent weeks.
"Corporate earnings are supporting the view that while there is a bit of uncertainty," the risk of another severe economic downturn is decreasing, said Kimberly DuBord, analyst with Chicago-based Briefing.com. The confidence boost extended to precious metals, she said.
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KEY COMMODITY PRICES: oil, base metals, gold, silver, livestock and wheat
Gold is sometimes purchased as a hedge against uncertainty, as some believe the precious metal holds its value better than equities and commodities during economic turmoil.
But gold also can trade like a commodity, moving higher when investors feel comfortable putting their money in riskier assets.
Precious metals futures benefited from the risk-trade interest today, as crude oil and copper, both bellwethers of investors' interest in risky holdings, both surged.
"It looks like we've formed a short-term bottom" in gold, said Jimmy Tintle, analyst at Transworld Futures.
Mr Tintle said bargain buying supported gold today, as futures prices remain well below June's all-time highs.
Gold was propelled to records in May and June amid worries about a double-dip recession and high euro-zone sovereign debt.
Gold initially retreated as European economies have stabilised, and recently has been caught in a range, not straying far from the $US1200 an ounce mark in July.
Traders will be looking to tonight’s (AEST) highly anticipated release of the results of stress tests on European banks.
If the results show the continent's banks stand on firm ground gold may decline, as such a result would further erode the demand for precious metals as alternative assets, analysts said.
Nymex October platinum settled near steady, falling US40 cents, to $US1529.40 an ounce. September palladium rose $US4.75, or 1.1 per cent, to $US456.90 an ounce.
Comex September silver settled up US31.7c, or 1.8 per cent, at $US18.120 an ounce.
