SAN FRANCISCO (MarketWatch) — Gold futures rose past $1,750 an ounce Thursday as traders digested the latest wave of news from the euro zone and mixed economic data from the U.S., as well as comments from the Federal Reserve a day earlier.
Gold for December delivery GC1Z +2.08% gained $29.30, or 1.7%, to trade at $1,759.80 an ounce on the Comex division of the New York Mercantile Exchange. The contract rose 1% Wednesday to break a three-session losing streak.
A move back to the $1,800 level “seems likely — possibly in November,” analysts at GoldCore said in a note Thursday.
They cited “the scale of the European and global debt crisis, the slowing U.S. and global economy and heightened macroeconomic, monetary and systemic risk” as factors behind any upside gains for the precious metal.
The political troubles of Prime Minister George Papandreou mounted on Thursday after Greece’s finance minister publicly opposed a plan to tie a referendum to the nation’s membership in the euro zone.
The premier’s bombshell announcement on Monday calling for a referendum on the latest bailout and austerity deal with the European Union has caused turbulence in global financial markets. Read more about disagreement over the referendum
“The decision to hold back the next tranche of financial aid to Greece and the questions over the nation’s position with the euro zone have seen the return of risk-off sentiment,” said James Moore, research analyst at FastMarkets.com in London.
Meanwhile, in a surprise move Thursday, the European Central Bank cut its key lending rate by a quarter of a percentage point, to 1.25%, while tying the move to an effort to stave off a full-blown recession in the region. Read about the ECB decision
On Wednesday, the Federal Open Market Committee left its key U.S. interest rate pegged at a historic low range of 0% to 0.25% where it has been since December 2008. Read more about the Fed decision
Also Wednesday, the Fed cut its growth outlook sharply for this year, 2012 and 2013, and Chairman Ben Bernanke said at a press conference that the Fed intends to hold rates close to zero until “at least” mid-2013 and was prepared to do more to bolster growth in the largest global economy. Read more about the growth outlook Read more on Bernanke’s statement
“The story here is that gold has regained its safe-haven status, yet is also responding quite positively to any indications of further monetary easing,” said Brien Lundin in his latest Gold Newsletter. “In particular, bulls looking for some straws in the wind were cheered by the dissent of committee member Charles Evans of the Chicago Fed, a monetary dove who was apparently pushing for more easing.”
In U.S. economic news Thursday, new applications for jobless benefits fell a bit more than expected, by 9,000 last week to 397,000, the Labor Department reported. Separately, the Commerce Department said factory orders edged up 0.3% to $453.5 billion in September.
But the Institute for Supply Management reported that activity in the service sectors of the U.S. economy expanded at a slightly slower pace in October, with the ISM non-manufacturing index inching lower, to 52.9% from 53.0% in September.
Against this backdrop, silver futures for December delivery SI1Z +1.92% added 25 cents, or 0.7%, to $34.20 an ounce on Comex, extending a 3.7% advance in the previous session.
January platinum PL2F +2.85% gained $38.40, or 2.4%, to $1,639.70 an ounce, while December palladium PA1Z +2.21% put on $8.50, or 1.3%, to $657.15 an ounce.
December copper HG1Z +0.10% declined 4 cents, or 1.2%, to $3.54 a pound.
Claudia Assis and Myra P. Saefong- MarketWatch November 3, 2011