US gold futures eventually moved up early Thursday on inflationary implications of higher crude oil prices after tossing back and forth early as players deciphered the latest US producer price gauge, traders said.
"It's responding to the energy markets that continue to seek higher prices. If we're going to have to live with higher energy prices, gold prices will continue to show stability," said George Nickas, a broker with FC Stone in New York.
Most-active gold futures for August on the COMEX division of the New York Mercantile Exchange rose $2.40 to $655.10 an ounce, trading in a range between $649.50 and $658.20. After chopping around on mixed signals in the May US producer price index, gold traders focused on the rise in oil.
US crude oil futures firmed Thursday on the back of Iran's nuclear dispute with the West, Middle East turmoil, and further signs that Opec may reject increased production quotas at its oil ministers meeting in September. Higher energy costs boosted producer prices 0.9 percent in May, but excluding volatile food and energy, prices paid at the factory level were up a more moderate 0.2 percent, the Labour Department reported Thursday.
In the overnight session, gold eased when the Swiss National Bank said it will sell 250 tonnes of gold over the next two years and use the money to increase its foreign exchange reserves. The central bank said the sales - the first since 2005 by the world's sixth-largest holder of gold - would be carried out in stages to avoid unsettling markets. "With that Swiss news we should have been more vulnerable to a sell off, but for everyone who wants to sell gold there's someone who wants to buy it," a trader said.
But gold's losses were limited follow the SNB's statement, with technical support factors proving resilient. "With the correction we've gone through over the last few weeks, we seem to have found equilibrium around $650 (an ounce) basis August. The general consensus is that a new wave of buyers has stepped in around that level," a said trader said.
COMEX estimated 1000 am EDT volume at 34,964 lots. Spot gold increased to $649.60/1.10 an ounce from $647.20/0.70 late Wednesday. London banks set the gold fix at $653.25 an ounce. COMEX July silver added 11.0 cents to $13.17 an ounce. The range spanned from $12.97 to $13.23.
Spot silver was quoted at $13.13/3.17 an ounce, up from $13.07/3.11 late Wednesday after it had hit a three-week low of $12.79. London silver fixed at $13.04. NYMEX July platinum rose $2.50 to $1,286.0 an ounce. Spot platinum was at $1,280/1,284. September palladium was up $0.85 at $371.50 an ounce. Spot palladium fetched $365.0/369.0.
Comments
Comments are closed.