Gold prices rose on Thursday, recovering from the previous day's two-week low, in line with the euro, stock markets and other commodities, but uncertainty over when Spain would request a rescue programme limited investors' confidence. Spot gold was up 0.6 percent at $1,762.60 an ounce at 1405 GMT, while US gold futures for December delivery were up $11.40 an ounce at $1,764.70.
The gold price is on track to end September with its largest quarterly gain in more than two years, of nearly 10 percent, after the Federal Reserve unveiled a third round of bullion-friendly monetary stimulus measures earlier this month. Gold fell sharply on Wednesday as worries over the euro zone debt crisis, which pressured the euro, prompted some investors to cash in gains ahead of quarter-end. It later recovered some ground, but remained down 0.5 percent on the day.
"(The actions of the central banks) were more dovish than anticipated and that has created this initial uplift in the gold price," Daniel Brebner, an analyst at Deutsche Bank, said. "The base case right now is gold trades in a bit of a range, with a lack of catalysts and with investors still anticipating something happening. If we move out of that range, I think it will be to the upside, because the risks are that policymakers err on the side of caution and stimulate," he said.
Spain is set to present its 2013 budget draft later on Thursday. A credible budget combined with comprehensive structural reforms could build the foundation for meeting conditions for a Spanish aid package and intervention by the European Central Bank in the bond market, analysts said.
Spanish government bond yields were stable as uncertainty over whether the troubled country would ask for a bailout kept investors edgy ahead of the unveiling of its budget. Holdings of gold exchange-traded funds, which issue securities backed by physical metal, eased back from record highs on Wednesday, with products tracked by Reuters reporting an outflow of nearly 340,000 ounces.
The products are still on track for a ninth straight week of inflows, however. Demand in major consumer India remained soft as high prices curbed interest in the metal. "A pickup in India's appetite for gold may require a stronger Indian rupee ahead of the festive gold buying season," HSBC said in a note. "While gold prices in dollar terms have increased 4 percent so far in September, they remain unchanged in rupee terms. This can be explained by a stronger rupee."
"Gold prices in local currency terms have declined from the high on 13 September... (but despite this), bullion merchants in India have expressed concerns that gold prices, which are still near record highs, have curbed physical demand." Silver was up 0.8 percent at $34.24 an ounce, spot platinum was up 1.2 percent at $1,647.24 an ounce, and spot palladium was up 0.8 percent at $630.72 an ounce.
The world's top platinum producer, Anglo American Platinum, has started disciplinary action including possible dismissal against workers taking part in an illegal strike in South Africa, the company said on Thursday. Impala Platinum, the world's second biggest producer, said on Thursday it had given workers a "pay adjustment" and details would follow.
Platinum prices are set to end the quarter up 13.2 percent, while palladium is heading for an 8.2 percent gain. Platinum group metal prices have been lifted by unrest in South Africa's mining sector, where violence at a mine operated by number three producer Lonmin killed 45 people. Silver has been the star performer of the precious metals this quarter, rising 24 percent so far, its best performance since the last quarter of 2010.