New York gold futures climbed Wednesday as a dollar rally lost steam after Federal Reserve Chairman Ben Bernanke said in congressional testimony the US economy could contract in the first half of this year.
Bernanke's remarks about possible US recession boosted alternative investment buying for gold. Bargain hunting among physical buyers after the recent price decline also cited.
Weaker oil prices following higher crude stocks data erased some of bullion's gains. June gold up 60 cents at $888.40 an ounce at 10:33 am EDT (1433 GMT) after hitting a 10-week low on Tuesday. Tuesday's sharp losses in heavy volume could signal end of liquidation by funds, dealers said.
Analysts said risk of further deleveraging remained high as strong physical demand would not prevent gold selling off Comex estimated 9 am (1300 GMT) volume 53,039 lots. Spot gold at $884.20/885.00, compared with $884.20/885.40 at the close Tuesday.
London afternoon gold fix was $890.00 an ounce. July platinum rebounded $12.30 to $1,950.10 an ounce after a 5-percent decline on Tuesday. Platinum boosted after global automakers expressed confidence of rebounding sales after steep decline in March - analyst. South Africa's power crisis may last many years unless electricity demand reduced, Eskom revealed. Spot traded at $1,928/1,938. June was down $13.50 or 3 percent at $435.10 an ounce. Spot fetched $435/440. May silver tracked gold to gain 6.0 cents to $16.950 an ounce, after touching a 9-week bottom of $16.30 on Tuesday. Spot silver at $16.91/16.96 against Tuesday's late quote at $16.81/16.86. Silver fixed in London at $16.89.
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