Gold Futures Jump on Weaker Greenback

Gold futures rallied on Thursday and reached their highest in last two weeks in reaction to weakening greenback and decision of US Federal Reserve to keep the interest rates unchanged.

Gold futures contract for June delivery jumped 1.1 percent or $18.20 to settle at $1,660.50 per ounce on the Comex division of the New York Mercantile Exchange. The respective contract reached its highest since April 12th. Many analysts thought that surge was inevitable on Thursday after a volatile session of Wednesday in which the precious metal took heavy beating.

Investors were upbeat on the precious metal after the statement of US Federal Reserve’s Chairman Ben Bernanke who said that the US Fed could consider another round of quantitative easing. Analysts and trader are now talking that the gold could rally up to its psychological barrier of $1,800 per ounce.

Analyst, James Steel from HSBC Securities commented, “Although the Fed did not announce another round of easing, intentions to keep monetary policy at highly accommodative levels are a bullish case for gold prices, the decline of gold prices on the Fed announcement was an overreaction,” he further added, “The ability of gold prices to bounce back is a good sign.”

Weaker US dollar also boosted the gold prices as the dollar index DXY which tracks the greenback’s performance against its major rivals fell to 78.946 on Thursday as compared to 79.072 on Wednesday’s late trading hours.

Among other metals, silver futures contract for May delivery gained 2.8 percent or $0.85 to settle at $31.21 per ounce while copper futures contract for same month delivery surged 1.8 percent or $0.07 to settle at $3.77 per pound.

Platinum futures for July delivery advanced 1.5 percent or $22.90 to settle at $1,570.20 per ounce while its sister metal palladium futures for June delivery gained 2.7 percent or $17.55 to settle at $672.65 per ounce.

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