US MIDDAY: gold rises

Gold rose more than 1 percent on Thursday, on track for its biggest daily gain in two weeks, on hopes for additional monetary stimulus from China and as fresh austerity steps in Spain renewed fears over the euro zone. Bullion extended early gains after Spain announced new measures to cut spending for its 2013 budget and to establish an independent authority to oversee its deficit-slashing promises.
Gold priced in euro terms surged over 1 percent to a record, highlighting the metal's traditional safe-haven appeal especially among Europeans in times of economic uncertainty. "The gold market is a market that reflects concerns. There is speculation that China will engage in additional stimulus measures," said Bill O'Neill, partner at commodity investment firm LOGIC Advisors.
The metal gained further after news that China's central bank had injected a record amount of cash this week. The move stoked talk that China may take steps to boost the country's weak stock market, sparking a global equities rally. Spot gold rose 1.3 percent to $1,774.71 an ounce by 11:58 am EDT (1558 GMT), set to snap three consecutive days of losses. Gold is within striking distance of this year's high at $1,790.30, set on February 29.
US gold futures for December delivery traded up $23.60 an ounce at $1,777.20, with volume in line to surpass its 30-day average, preliminary Reuters data showed. There was active buying of bull call spreads and other bullish option plays as some investors bet gold could rise sharply by the year-end, said independent COMEX gold option floor trader Jonathan Jossen.
Gold is on track to end September with its largest quarterly gain in more than two years, of 11 percent, after the US Federal Reserve unveiled a third round of bullion-friendly monetary stimulus this month. Silver rallied 1.7 percent to $34.50 an ounce. Among platinum group metals, platinum traded up 1.3 percent at $1,648.99 an ounce, and spot palladium added 1 percent at $631.47 an ounce.
Platinum prices are set to end the quarter up around 13 percent, while palladium is heading for an 8 percent gain. Platinum group metal prices have been lifted by unrest in South Africa's mining sector, where violence at a mine operated by No 3 producer Lonmin killed 45 people.