Futures Pros: Gold futures jump to 2-day high on broadly weaker U.S. dollar

2011-04-14 07:28:59 GMT (Futures Pros)

Futures Pros – Gold futures were up for a second day on Thursday, climbing to a two-day high as a broadly weaker U.S. dollar boosted the appeal of the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,464.05 a troy ounce during European morning trade, climbing 0.45%.

It earlier rose to USD1,464.95 a troy ounce, the highest price since April 12.

The U.S. dollar came under broad selling pressure as expectations grew the Federal Reserve would keep its loose monetary policy.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.35% to hit 74.92, the lowest since December 2009.

Dollar weakness usually benefits gold, as it boosts the metal’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

Meanwhile, London-based industry research group GFMS Limited said in its widely-anticipated 2011 Gold Survey published on Wednesday that it expected gold prices to climb to USD1,600 an ounce in 2011, as investors boost demand for the metal as a hedge against inflation.

According to the report, demand for physical gold bars surged by 66% in 2010 to a record 880.5 tons, led by purchases from China. Global jewelry demand rose by 11% to 2,017 tons, as India, the world’s largest gold consumer, purchased 685 tons, up 36% from the previous year.

Central banks bought 73 tons of gold last year, halting a two-decade trend of reducing their gold reserves.

Elsewhere, silver for July delivery surged 2.35% to hit USD41.22 a troy ounce, while copper for July delivery shed 0.2% to trade at USD4.307 a pound during European morning trade.

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