Investing.com - Gold futures surged to the highest level in more than six-weeks on Thursday, adding to strong gains made in wake of the Federal Reserve’s pledge to keep rates lower for longer, while some safe-haven bids re-emerged after prices rose above a key technical level.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,729.65 a troy ounce during U.S. morning trade, surging 1.73%.
It earlier rose by as much as 1.9% to trade at USD1,730.45 a troy ounce, the highest since December 8.
Futures were likely to find support at USD1,649.25 a troy ounce, Wednesday’s low and short-term resistance at USD1,760.35, the high from December 8.
Gold’s robust gains came on the back of a broadly weaker U.S. dollar. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.4% to trade at 79.28, the lowest since December 12.
The U.S. dollar came under broad selling pressure after the Fed said in a statement Wednesday that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
At his press conference following the decision, Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments fuelled speculation that the central bank may embark on a third round of quantitative easing, sparking a rally in gold prices. When the Fed announced the second round of quantitative easing in November last year, gold prices scored record highs for four consecutive sessions.
The central bank will provide an explicit discussion of FOMC member expectations for the balance sheet when the minutes to this meeting are released on February 15.
Adding to the bullish sentiment on the precious metal, prices rose above their 100-day moving average, triggering fresh buy orders and indicating upward momentum in prices.
Meanwhile, euro-denominated gold futures rose to a ten-week high of EUR1,313.70, less than 4.5% away from September’s all-time high of EUR1,374.70.
Greek media reported earlier that the country’s creditors were prepared to accept lower interest rates on new bonds to be issued to replace their existing Greek holdings.
An agreement is necessary if Greece is to get the next tranche of bailout funds that would prevent a devastating debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Also in the euro zone, the yield on Portuguese 10-year bonds hit a euro-era high of 15.13%, amid renewed fears the country may need a second international bailout.
Elsewhere on the Comex, silver for March delivery rallied 1.35% to trade at a 10-week high of USD33.58 a troy ounce, while copper for March delivery surged 1.7% to trade at a four-mont top of USD3.895 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,729.65 a troy ounce during U.S. morning trade, surging 1.73%.
It earlier rose by as much as 1.9% to trade at USD1,730.45 a troy ounce, the highest since December 8.
Futures were likely to find support at USD1,649.25 a troy ounce, Wednesday’s low and short-term resistance at USD1,760.35, the high from December 8.
Gold’s robust gains came on the back of a broadly weaker U.S. dollar. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.4% to trade at 79.28, the lowest since December 12.
The U.S. dollar came under broad selling pressure after the Fed said in a statement Wednesday that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
At his press conference following the decision, Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments fuelled speculation that the central bank may embark on a third round of quantitative easing, sparking a rally in gold prices. When the Fed announced the second round of quantitative easing in November last year, gold prices scored record highs for four consecutive sessions.
The central bank will provide an explicit discussion of FOMC member expectations for the balance sheet when the minutes to this meeting are released on February 15.
Adding to the bullish sentiment on the precious metal, prices rose above their 100-day moving average, triggering fresh buy orders and indicating upward momentum in prices.
Meanwhile, euro-denominated gold futures rose to a ten-week high of EUR1,313.70, less than 4.5% away from September’s all-time high of EUR1,374.70.
Greek media reported earlier that the country’s creditors were prepared to accept lower interest rates on new bonds to be issued to replace their existing Greek holdings.
An agreement is necessary if Greece is to get the next tranche of bailout funds that would prevent a devastating debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Also in the euro zone, the yield on Portuguese 10-year bonds hit a euro-era high of 15.13%, amid renewed fears the country may need a second international bailout.
Elsewhere on the Comex, silver for March delivery rallied 1.35% to trade at a 10-week high of USD33.58 a troy ounce, while copper for March delivery surged 1.7% to trade at a four-mont top of USD3.895 a pound.