Silver contract rallies, biggest gainer on a percentage basis
By V. Phani Kumar, MarketWatch
NEW YORK (MarketWatch) — Gold futures rose Thursday, buoyed by weakness in the dollar and by the Federal Reserve’s reiterated commitment to ultra-easy monetary policy.
Gold for December delivery GCZ2 +0.79% gained $13.30 to $1,714.90 an ounce on the New York Mercantile Exchange.
Gold futures had settled $7.80 lower on Wednesday, bouncing off the psychologically-important $1,700 level.
After the close of regular gold trading Wednesday, the Federal Open Market Committee made no changes to its ultra-easy monetary policy, continuing to express concern over the trajectory of growth in the largest global economy as well as weak employment trends.
“The Fed’s reiteration to maintain its ultra-expansionary monetary policy at least until mid-2015 helped gold stage a slight recovery overnight,” wrote analysts at Commerzbank in a note to clients. “Nevertheless, following the serious losses of recent days, it remains vulnerable, and short-term market players will no doubt be selling more of their positions.”
HSBC Securities analysts James Steel and Howard Wen agreed.
“A highly accommodative stance by the Federal Reserve ... is positive for gold prices in the medium term,” the HSBC strategists wrote in a note. “However, we continue to see some modest near-term pressure on gold.”
A weakened U.S. dollar lent some support to metal prices.
The ICE dollar index DXY -0.05% , a measure of the greenback’s performance against a basket of six major global currencies, edged down to 79.865 from 79.932 late Wednesday.
In other metals trading, December silver futures SIZ2 +1.69% rallied, gaining 47 cents to $32.09 an ounce, while December copper HGZ2 +0.25% was unchanged at $3.57 a pound.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
