Gold futures gained traction above $620 an ounce in early US trade on Thursday as trend chasers kept the rally going and a weak dollar and stalled stock market freed up money for precious metals.
Gold futures are up $45 since starting to rally on October 24 from $576 an ounce, catalysed by a break above the downward sloping trendline from the 26-year highs in May. "Everybody is turning bullish after that," a bullion trader said. "It's technicals and good investment money coming into this market."
At 9:45 am EST (1445 GMT), December gold at the COMEX division of the New York Mercantile Exchange was up $5.20 at $624.70 an ounce. It opened slightly lower, pausing from Wednesday's rally, then, from a low of $616.50, reached $624.80 in early open-outcry trade, the highest price since September 8.
Gold built sufficient upward momentum this week to break its recent correlation with oil prices, which have tumbled on doubts that Opec members can deliver on a plan to cut production. Some of the investor money leaving the energy market has been directed to gold. Gold's acceleration higher this week also came as the Dow Jones industrial stock average pulled back from last week's record high.
But gold mining shares have kept rallying. The XAU Index of gold and silver mining companies at the Philadelphia Stock Exchange hit its highest level since September 11 on Wednesday.
Spot gold bullion was quoted at $619.90/0.90, up from New York's close at $618.30/9.30. Bullion dealers fixed London's afternoon spot reference price at $620.75 an ounce. December silver was up 10.5 cents at $12.58 an ounce, trading from $12.385 to $12.64, the contract's highest since September 8. Spot silver rose to $12.50/57 from $12.45/52. The fix was at $12.41.
NYMEX January platinum was up $23.80 at $1,124.50 per ounce. Spot platinum closed priced at $1,122/1,127. December palladium was $2.20 higher at $326.30 an ounce. Spot palladium fetched $321/326 an ounce.
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