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Gold Rebounds To Close Higher

4/5/2012 2:05 PM ET

Gold futures closed higher Thursday, with investors seeking a bargain after the precious metal plunged over 3.5 percent yesterday to a 12-week low. Gold prices moved up notwithstanding a strengthening dollar, with the euro under pressure on some lukewarm response to the Spanish and Italian bond auctions.

Gold for June delivery, the most actively traded contract, gained $16 or 1 percent to close at $1,630.10 an ounce Thursday on the Comex division of the New York Mercantile Exchange.

Gold traded at an intraday high of $1,634.80 an ounce and a low of $1,620.70 an ounce.

Yesterday, gold prices plunged about 3.5 percent to a 3-month low after the Fed Reserve policy meeting revealed no further monetary stimulus, and as well on a strong dollar.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.054 on Thursday, up from 79.764 in North American trade late Wednesday. The dollar scaled a high of 80.18 intraday, with a low of 79.62.

The euro was trading lower against the dollar at $1.3066 on Thursday, as compared to $1.3139 late Wednesday. The euro had scaled a high of $1.3164 intraday with a low of $1.3036.

In economic news from the U.S., the Labor Department said new claims for unemployment came in at a seasonally adjusted level of 357,000, a decline of 6,000 from the previous week's revised average of 363,000. While the previous figure was revised up somewhat from the 359,000 initially reported, this week's numbers come in lower than the 360,000 predicted by most economists.

China's service sector having expanded in March at a slower pace compared to the previous month, a survey by Markit Economics revealed. Firms remained fairly upbeat about their business prospects with confidence jumping to a 11-month high. The headline seasonally adjusted HSBC/Markit Business Activity Index, an indicator of activity in the service sector, read 53.3 in March compared to 53.9 in February.

From the eurozone, Germany's industrial production declined more than expected in February, data from the Federal Ministry of Economy and Technology showed. Industrial output dropped 1.3 percent in February from a month ago, offsetting January's 1.2 percent growth. Economists had expected a 0.5 percent decrease.

Meanwhile, the Bank of England left its key interest rate unchanged at 0.50 percent, while maintaining its asset purchase program at GBP 325 billion.

by RTT Staff Writer

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