Gold climbed to mark a one-year closing high as the euro strengthened against the dollar in the wake of a European Central Bank meeting, boosting investment demand for the precious metal. According to MarketWatch report Gold for December delivery rose $11.30, or 0.8 per cent, to settle at $1,350.30 an ounce, following a 0.4 per cent loss it a day earlier. The settlement was highest since September 6, 2016, for a most-active contract, according to FactSet data. The SPDR Gold Shares exchange-traded fund climbed 0.9 per cent.
The euro rose firmly against the dollar following the ECB’s decision to leave interest rates unchanged. In a news conference, the central bank’s President Mario Draghi indicated that the long-awaited decision on how and when to taper the ECB’s asset purchases would likely come in October.
“Draghi has been reluctant to spell out the month, date and the pace of the tapering process,” said Naeem Aslam, chief market analyst at ThinkMarkets. He “certainly has the ability to punch above his weight and we know that very well. However, the president of the European Central Bank wants to be cautious and avoid a catastrophe.” Meanwhile, weak U.S. economic data have “pushed the odds for a [U.S. Federal Reserve] rate hike to ground,” said Aslam. “Clearly, the Fed cannot be comfortable with weaker job market and the fact is that worse is still yet to come.”
Data Thursday showed weekly jobless claim rose by 62,000 to 298,000 in the wake of Hurricane Harvey—the highest level since spring 2015. Against this backdrop, a key measure of the greenback, the ICE U.S. Dollar Index , was off 0.7 per cent at 91.673. Gold and the U.S. unit typically move inversely as gold priced in greenbacks is more attractive to investors using another currency. Gold fell Wednesday after the White House and lawmakers reached a deal to extend the deadline on the federal government’s debt ceiling and as stocks recouped some of their losses from the previous session. The precious metal had rallied to start the holiday-shortened week, getting a lift from nervousness over North Korea’s weekend nuclear display, weakness in the dollar and broad losses in U.S. equities.
Elsewhere in metals trading, silver for December delivery rose 20.6 cents, or 1.2 per cent, to $18.116 an ounce, the highest since April 19. The iShares Silver Trust ETF rose 1.1 per cent. Copper pulled back but remained near a three-year high, with December copper ending at $3.144 a pound, down less than a cent, or 0.3 per cent. October platinum added $9.70, or 1 per cent, to $1,016.80 an ounce, while December palladium finished at $948.85 an ounce, up $16.95, or 1.8 per cent.
