Gold prices surged during Thursday’s US trading session as the multi-year lows seen a month ago have evaporated as short covering boosted the entire precious metal’s complex.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was last up $25.50 or 2.3 percent to $1,153.40 per ounce. Trade has ranged from $1,132.10 to $1,153.70.
On July 24, spot gold touched $1,077.50 per ounce, the lowest price since April 2010. Prices remained at that level for a short period before climbing over the past few weeks.
The past two sessions have seen the yellow-metal jump to the highest price in over a month upon the release of the Federal Open Market Committee (FOMC) July meeting minutes.
Investors read the statement – especially the concern over the slowdown in the Chinese economy – as a dovish tone heading into the oft-discussed September FOMC meeting.
Federal Reserve Chairwoman Janet Yellen has expressed a desire to raise interest rates this calendar year after rates have been at near zero levels since December 2008.
“As for gold, we did in fact go out hard and far upon a limb last Monday when writing here regarding the net-short position by the public ‘specs’… strongly suggesting that the lows have been seen in gold in US dollar terms,” Dennis Gartman, editor and publisher of The Gartman Letter, said.
In a heavy US data day, weekly unemployment claims were at 277,000, near the forecast of 272,000 and holding below the psychological 300,000 mark.
Meanwhile existing home sales in July were at 5.59 million, above the forecast of 5.45 million. The Philly Fed Manufacturing Index in August was at 8.3, besting the 6.9 prediction.
Additionally, the CB leading index month-over-month in July declined 0.2 percent, missing the estimate of a 0.2 percent uptick.
Turning to US equity markets, the Dow Jones industrial average and S&P were down 1.3 percent and 1.2 percent respectively, while the dollar was 0.7 percent softer at $1.1195 against the euro.
As for the other precious metals, Comex silver for September delivery was last up 33.1 cents at $15.510 per ounce. Trade has ranged from $15.255 to $15.560.
Platinum for October delivery on the Nymex rose $19.90 to $1,033.0 per ounce, while the most-actively traded palladium contract was at $622.75 per ounce, up $13.0.
(Editing by Tom Jennemann)
The post Gold jumps, multi-year lows erased on short covering appeared first on The Bullion Desk.
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