US gold futures recouped initial losses and rose in choppy trade on Thursday as the dollar reversed course to weaken against the euro and a serious mining accident in South Africa stirred concern even though its effect on global supply was deemed minimal.
At 10:51 am EDT (1451 GMT), most-active December gold on the Comex division of the New York Mercantile Exchange was up $3.10 at $738.70 an ounce, trading in a wide range of $726.30 to $739.60.
The market largely ignored news of an accident that stranded as many as 3,000 miners underground in South Africa's Elandsrand mine. South Africa's mining minister on Thursday ordered the mine owned by Harmony Gold to close for six weeks.
Some 850 miners remained trapped more than a mile underground in a South African gold shaft on Thursday after a daylong rescue effort. About 2,350 miners were lifted to the ground earlier.
South Africa is by far the biggest producer of gold in the world. However, Gero said the incident had no impact on the market. "It doesn't seem to be a shortage of actual physical supply," he said.
James Steel, analyst at HSBC in New York, echoed Gero's view as he said the currency market was currently a far more important factor for the short-term price of gold.
"Mine supply has to be looked at on an aggregate basis. Therefore, it may not have a great impact on the gold price necessarily," Steel said. "One day's mining supply will not make a big difference because we have a lot of above-ground supplies."
Gold bullion was quoted at $732.40/733.00, up from the New York Wednesday close at $729.70/730.50. London bullion dealers fixed the afternoon spot reference price at $725.50. Comex December silver was up 4.5 cents at $13.515 an ounce, trading between $13.15 and $13.53.
Spot silver was quoted at $13.41/13.44 which was sharply higher than Wednesday's late New York quote of $13.29/13.34. London silver was fixed at $13.22. Nymex January platinum was up $11.10 at $1,380 an ounce. Spot platinum was quoted at $1,363/1,368. December palladium jumped $3.80 or 1.1 percent to $365.45 an ounce. Spot palladium fetched $364/369.
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