Investing.com - Gold futures added to gains during U.S. morning trade on Thursday, moving further off the lowest levels of 2012 as some safe haven buying re-emerged amid growing concerns over the health of Spain’s banking sector, while renewed hopes for further easing from the Federal Reserve lent further support.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,554.95 a troy ounce during early U.S. trade, jumping 1.2%.
It earlier rose by as much as 1.4% to trade at a two-day high of USD1,557.65 a troy ounce. Prices touched USD1,526.95 a troy ounce on Wednesday, the lowest since December 29, 2011.
Gold futures were likely to find support at USD1,523.95 a troy ounce, the low from December 29 and resistance at USD1,585.65, the high from May 14.
Gold’s safe haven appeal was boosted by reports that rating’s agency Moody’s may be preparing to announce widespread downgrades on Spain’s banking sector later in the session.
Shares of Spain’s third-largest lender Bankia tumbled on the IBEX exchange in Madrid, amid reports that consumers have withdrawn more than EUR1 billion in funds since the bank was nationalized last week.
Spain’s Treasury successfully auctioned the full targeted amount of EUR2.5 billion at a government bond sale earlier, but the country’s borrowing costs rose sharply, pressured higher by worries over the health of the country’s banking sector.
Meanwhile, fears over the implications of a Greek exit from the euro zone continued as the country prepared for fresh elections next month, which could see anti-austerity parties take power.
Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk.
Minutes from the Fed’s April policy meeting provided further support, after policymakers said they are open to further efforts to stimulate the U.S. economy if growth falters or threats escalate.
The minutes of the central bank's April 24-25 meeting released Wednesday stated that "several members" thought additional Fed support could be needed if the recovery lost momentum or if the risks to the economy became great enough.
Markets are watching the Fed minutes closely for hints of whether the central bank will engineer another round of asset purchases, or quantitative easing. Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
Earlier in the day, government data showed that the number of individuals filing for initial jobless benefits in the week ending May 12 held steady at 370,000, confounding expectations for a decline to 365,000.
Gold futures have been on a rapid decline since the uncertain outcome of the May 6 elections in Greece, which threw the future of the country’s international bailout deal into doubt and fuelled fears over a possible Greek exit from the euro zone.
Gold prices are down nearly 8% since the start of May, declining in 10 of the past 12 trading sessions, leading up to today.
Some market participants noted that heavy losses in stocks and other commodities markets accelerated gold’s sell-off in recent sessions, as traders were forced to sell their gold holdings to raise cash to cover losses elsewhere.
In October 2008, gold prices tumbled 18% as turmoil in global financial markets led to losses in global equity and commodity markets. The precious metal rallied 23% in the next two months.
Elsewhere on the Comex, silver for July delivery surged 1.75% to trade at USD27.66 a troy ounce, after falling to the lowest since December 29 in the previous session, while copper for July delivery added 0.2% to trade at USD3.485 a pound, rebounding from the lowest since January 10.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,554.95 a troy ounce during early U.S. trade, jumping 1.2%.
It earlier rose by as much as 1.4% to trade at a two-day high of USD1,557.65 a troy ounce. Prices touched USD1,526.95 a troy ounce on Wednesday, the lowest since December 29, 2011.
Gold futures were likely to find support at USD1,523.95 a troy ounce, the low from December 29 and resistance at USD1,585.65, the high from May 14.
Gold’s safe haven appeal was boosted by reports that rating’s agency Moody’s may be preparing to announce widespread downgrades on Spain’s banking sector later in the session.
Shares of Spain’s third-largest lender Bankia tumbled on the IBEX exchange in Madrid, amid reports that consumers have withdrawn more than EUR1 billion in funds since the bank was nationalized last week.
Spain’s Treasury successfully auctioned the full targeted amount of EUR2.5 billion at a government bond sale earlier, but the country’s borrowing costs rose sharply, pressured higher by worries over the health of the country’s banking sector.
Meanwhile, fears over the implications of a Greek exit from the euro zone continued as the country prepared for fresh elections next month, which could see anti-austerity parties take power.
Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk.
Minutes from the Fed’s April policy meeting provided further support, after policymakers said they are open to further efforts to stimulate the U.S. economy if growth falters or threats escalate.
The minutes of the central bank's April 24-25 meeting released Wednesday stated that "several members" thought additional Fed support could be needed if the recovery lost momentum or if the risks to the economy became great enough.
Markets are watching the Fed minutes closely for hints of whether the central bank will engineer another round of asset purchases, or quantitative easing. Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
Earlier in the day, government data showed that the number of individuals filing for initial jobless benefits in the week ending May 12 held steady at 370,000, confounding expectations for a decline to 365,000.
Gold futures have been on a rapid decline since the uncertain outcome of the May 6 elections in Greece, which threw the future of the country’s international bailout deal into doubt and fuelled fears over a possible Greek exit from the euro zone.
Gold prices are down nearly 8% since the start of May, declining in 10 of the past 12 trading sessions, leading up to today.
Some market participants noted that heavy losses in stocks and other commodities markets accelerated gold’s sell-off in recent sessions, as traders were forced to sell their gold holdings to raise cash to cover losses elsewhere.
In October 2008, gold prices tumbled 18% as turmoil in global financial markets led to losses in global equity and commodity markets. The precious metal rallied 23% in the next two months.
Elsewhere on the Comex, silver for July delivery surged 1.75% to trade at USD27.66 a troy ounce, after falling to the lowest since December 29 in the previous session, while copper for July delivery added 0.2% to trade at USD3.485 a pound, rebounding from the lowest since January 10.