MW: Gold futures extend gains ion central bank hopes
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Gold futures rose on Tuesday, as increased hopes of global central bank action spurred investors into buying commodities.
Gold futures for December delivery GCZ2 +2.22% rose $8.70, or 0.5%, to $1,696.10 an ounce, which would leave it on track to close at the highest level in more than five months.
Expectations of further stimulus measures from central banks have lately buoyed metals prices, with the U.S. Federal Reserve Chairman Ben Bernanke hinting at a another round of quantitative easing last Friday.
In the euro zone, hopes were high that the European Central Bank would unveil details of a new bond-buying program at its policy meeting on Thursday. ECB President Mario Draghi indicated late Monday that bond purchases with maturities of up to three years would not violate the bank’s mandate, according to media reports. See: Draghi remarks fuel Italy, Spain bond rally .
“The ECB is evidently planning to launch a new government bond intervention program, which would inject further liquidity into the market. This should also benefit commodities due to the lack of attractive alternative investments,” analysts at Commerzbank said in a note.
Gains were broad-based across the metals complex.
Silver for December delivery SIZ2 +5.68% rose 71 cents, or 2.3%, to $32.16 an ounce. Silver prices have soared a good 15% since the end of July, the Commerzbank analysts said, and has “been underpinned by speculative financial investors, who more than tripled their net long positions to 24,300 contracts in the four weeks to 28 August.”
December copper HGZ2 +0.90% gained 3 cents, or 0.8%, to $3.48 a pound, while palladium for the same month PAZ2 +3.89% added $9.65, or 1.5%, to $639.05 an ounce.
October platinum PLV2 +3.48% picked up $16.70, or 1.1%, to 1,554.00 an ounce.
Sara Sjolin is a MarketWatch reporter, based in London.
