By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures gained Wednesday as Japan’s stock market improved and, closer to home, U.S. wholesale prices jumped as the nation’s housing market showed new signs of weakness.
Gold for April delivery (GCJ11 1,404, +10.70, +0.77%) gained $6.20, or 0.5%, to $1,399 an ounce on the Comex division of the New York Mercantile Exchange. It traded as high as $1,405.70 an ounce earlier.
Gold added to early gains after the Commerce Department reported construction of new homes plunged 22.5% in February, erasing January’s gains and marking the largest single-month drop in housing starts since March 1984. Read more about U.S. housing starts and building permits dropping sharply in February.
Metals traders also took in data indicating higher producer prices, up a seasonally adjusted 1.6% for February as food costs experienced their biggest one-month rise since 1974. See more about wholesale-level inflation running at a rate hotter than forecast.
May copper (HGK11 424.60, +10.90, +2.64%) bounced off nearly three-month lows, gaining 10 cents, or 2.5%, to $4.24 a pound.
Some support also came as Moody’s Investors Service downgraded Portugal’s debt two notches to A3, rekindling concerns about euro-zone sovereign debt. Read more on Moody’s latest European debt downgrade.
In Bahrain, security forces broke up anti-government protests, and at least three people had died after police opened fire on the demonstrators, according to reports.
Wednesday’s improvement also came as Asian markets rebounded off sharp declines prompted by the uncertainty over the nuclear crisis in Japan and the devastating earthquake and tsunami.
Rounding out the action in metals futures, silver tracked gold’s gain, while other precious metals overcame weak starts to also trade higher.
Silver for May delivery (SIK11 3,492, +80.30, +2.35%) advanced 52 cents, or 1.6%, to $34.65 an ounce.
Palladium for June delivery (PAM11 718.10, +13.20, +1.87%) turned higher, adding $10.70, or 1.5%, to trade at $715.60 an ounce. Sister metal platinum also turned, with the April contract (PLJ11 1,724, +18.50, +1.09%) up $20.20, or 1.2%, to
