New York gold futures rallied on Wednesday as the dollar lost ground to the euro and inflation fears lingered among investors who were waiting for word from the Federal Reserve later in the session about any interest-rate policy adjustments, traders said. COMEX February gold raced up $16.20 to $1,139.20 an ounce on the COMEX division of NYMEX.
Range spanned $1,122.40 and $1,140.60 an ounce. Dollar declines against the euro helped lift dollar-denominated gold prices, said traders. "We have favourable equity markets with lots of upside strength, as well as weakness in the dollar. We've seen gold holding relatively well on this latest dollar rally, so now that the dollar is starting to show weakness that lends even more spillover support to metals markets," said Adam Klopfenstein, Senior Market Strategist, Lind-Waldock (a division of MF Global) in Chicago.
"Gold's moving more off of inflationary perceptions and the verbiage from the Fed this afternoon. But the market is anticipating that the Fed is in a place where the its hands are tied right now," said Klopfenstein. Spot gold advances to $1,137.70 an ounce by 11:16 am EST (1616 GMT) from $1,123.70 an ounce late Tuesday in New York. COMEX estimated 11 am EST (1600 GMT) gold volume at 97,602 lots. March silver rose 25.50 cents to $17.71 an ounce.
Range spanned $17.35 to $17.7950 per ounce. COMEX estimated 11 am EST silver volume at 15,953 lots. Spot silver jumped to $17.67 an ounce from $17.38 an ounce in New York's previous session. January platinum firms $10.30 to $1,462.80 an ounce. Spot platinum strengthens to $1,456 an ounce from $1,444.50 in late Tuesday dealings. March palladium advanced $9.60 to $375.65 an ounce. Spot palladium rises to $371 an ounce from $362.50 an ounce in late Tuesday business.