US gold futures rebounded nearly 2 percent on Wednesday following the previous session's decline, fuelled by worries due to massive liquidity injections by central banks and after a major brokerage upgraded its price forecast. Gold for April delivery rose $14.90, or 1.7 percent, to $907.40 an ounce at 10:10 am EST (1510 GMT) on the COMEX division of the New York Mercantile Exchange.
Ranged $896.20 to $910.90. Strong buying driven by worries about inflationary actions taken by central banks to restore liquidity and get the economy moving - Tom Dyson, editor at DailyWealth.com. Passage of President Barack Obama's $825 billion proposed economic stimulus package would likely be inflationary and bullish for gold, and a failure would be bearish, said analysts.
Gold investment demand will double in 2009 compared to 2007, and gold prices will average $1,000 in 2009 - John Reade, UBS metals strategist. Sharp investment inflows continued to trigger buying. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its bullion holdings held steady at record 853.37 tonnes as of February 3.COMEX estimated 9:00 am volume at 27,412 lots, options turnover at 1,256 lots.
Gold futures contracts underperformed crude oil in percentage terms on Wednesday. Gold/oil ratio turned lower to 21.8, compared with 21.9 in the previous session. Spot gold was at $905.10 an ounce, up 0.5 percent from the last trade on Tuesday.
March silver gained 23.5 cents, or 1.9 percent, to $12.535 an ounce on gold's strength and bargain hunting. Ranged $12.305 to $12.590. COMEX estimated 9:00 am volume at 3,761 lots. Spot silver quoted at $12.51 an ounce, down 0.9 percent from its previous close.
NYMEX April platinum was up $11.50, or 1.8 percent, to $975.00 an ounce as a higher stock market boosted economic sentiment. Spot platinum quoted at $969.50 an ounce, up 1 percent from its last finish. NYMEX March palladium inched up $1.45 to $194.40 an ounce in tandem with platinum's gains. Spot palladium was at $192.50 an ounce, up 0.5 percent from its previous close on Tuesday.