Gold futures trade above USD1,750 with Greece in focus

Gold futures trade above USD1,750 with Greece in focus
Gold futures trade above USD1,750 with Greece in focus
Gold futures trade above USD1,750 with Greece in focus
Gold futures trade above USD1,750 with Greece in focus
Gold futures trade above USD1,750 with Greece in focus
Gold futures trade above USD1,750 with Greece in focus
Gold futures trade above USD1,750 with Greece in focus
Gold futures trade above USD1,750 with Greece in focus


Forexpros – Gold futures rose to a six-week high on Thursday, trading above the psychologically-important level of USD1,750-an-ounce, after the European Central Bank unexpectedly cut its benchmark interest rate, while traders continued to eye developments out of Greece.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,759.85 a troy ounce during U.S. morning trade, jumping 1.75%.    

It earlier rose by as much as 2.3% to trade at USD1,768.15 a troy ounce, the highest price since September 22.

Euro-denominated gold also rose to six-week high of EUR1,284.50 a troy ounce.

The ECB cut its benchmark interest rate from 1.5% to 1.25% earlier in the day, as the region’s escalating debt crisis overshadowed concerns over persistently high inflation.

Lower interest rates can give gold a lift, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.

Speaking at the bank’s post policy meeting press conference new president, Mario Draghi said that ongoing tensions in financial markets could slow the pace of growth in the euro zone and said the region’s economy continued to be “subject to particularly high uncertainty and intensified downside risks.”

Gold traders continued to eye developments out of Greece. According to media reports, Greek Prime Minister George Papandreou abandoned plans to hold a referendum on its recent bailout deal after the country's main opposition party said it would back the aid package, citing two officials close to the Greek premier.

Later in the day, leaders from the G-20 group of nations were to meet in Cannes to discuss a range of issues, including the implications of a Greek default or possible euro zone exit.

Meanwhile, gold prices continued to draw support from comments by Federal Reserve Chairman Ben Bernanke on Wednesday, saying that an additional round of asset purchases, specifically mortgage-backed securities, was a “viable option” after the bank lowered its growth forecast for next year.

“We are prepared to do more and we have the tools to do more,” Bernanke said.

Elsewhere on the Comex, silver for December delivery rose 0.56% to trade at USD34.13 a troy ounce, while copper for December delivery slumped 0.9% to trade at USD3.549 a pound.