Wednesday 29 May 2024

Gold hits 11-month high; $1,800 in sight

London, October 4, 2012


Gold shot to its highest since last November on Thursday, with sights set firmly on the psychologically key $1,800 per ounce level, as the European Central Bank elected to keep interest rates at ultra low levels.
A broadly stronger euro kept its firm tone - and supported bullion - after ECB president Mario Draghi said the bank's debt-buying plan had reduced tensions, even though economic growth remained weak.
Also, a mildly positive US private sector employment report on Wednesday was keeping Friday's US non-farm payrolls report in sharp focus as markets checked odds for an upside surprise.
Spot gold was up 0.6 percent at $1,787.99 per ounce, having earlier hit an 11-month high at $1,794.40. US gold futures gained 0.6 percent to $1,790.30.
Dealers said the supportive low interest rate environment and backdrop of further monetary stimulus made further price gains inevitable.
"The question is of when rather than if we break out," said Simon Weeks, director of precious metal sales at ScotiaMocatta. "We've made about three highs in the low $1,790s. It needs to close above this resistance in the low to mid 90s, if we close above there, the next resistance is $1,815," he added.
The European Central Bank kept its main interest rate unchanged at 0.75 percent, while the Bank of England kept its rate on hold at a record low 0.5 percent and its quantitative easing policy intact. - Reuters

Tags: Gold | bullion |


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