US gold futures rose 2 percent Thursday to their highest in nearly 4 months on strong investment demand amid renewed bank worries and increased buying of out-of-the-money call options. Gold for April delivery jumped $16.00, or 1.8 percent, to $918.20 an ounce at 10:58 am EST (1558 GMT) on the COMEX division of the New York Mercantile Exchange.
Ranged $903.40 to $926.30 - near $931.30, the highest price since January 30. Gold futures supported by heavy buying of gold call options with an upside skew, and some deep out-of-the-money calls, said Jonathan Jossen, COMEX gold options floor trader. Good support seen at $920 in April futures, added Jossen. Gold's recent rally supported by an increase of overall allocation from investment portfolios into the yellow metal - traders.
Safe-haven buying bolstered gold on battered bank stocks led by Bank of America, whose shares sank to their lowest level since 1984 on fears about massive losses. Sharp investment inflows continued to trigger buying. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its bullion holdings rose 6 tonnes to record 859.49 tonnes as of February 4. Gold futures contracts outperformed crude oil in percentage terms on Wednesday.
Gold/oil ratio turned lower to 22.9, compared with 22.7 in the previous session. Spot gold was at $918.35 an ounce, up 1.5 percent from the last trade on Wednesday. March silver rose 29.0 cents, or 2.3 percent, to $12.760 an ounce on the back of gold's rally. Ranged $12.270 to $12.890. Spot silver quoted at $12.77 an ounce, up 2.1 percent from its previous close. Silver fixed in London at $12.80 an ounce.
NYMEX April platinum climbed $14.80, or 1.5 percent, to $984.50 an ounce, helped by broad-based precious metals' strength. Spot platinum quoted at $976.00 an ounce, up 1.2 percent from its last finish. NYMEX March palladium gained $5.80, or 2.9 percent, to $203.80 an ounce in tandem with platinum's gains. Spot palladium was at $198.50 an ounce, up 2.3 percent from its previous close on Wednesday.
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