Gold Closes Higher On Greek Debt Deal Optimism

In gold news, gold closed higher today for a second day in anticipation of a resolution to the Greek debt swap deal. Gold prices were also fueled by inflation concerns as the US Federal Reserve considers another bond buying program.

Mar 8, 2012
NASDAQ

(RTTNews.com) - Gold futures closed higher for a second day Thursday, on global cues anticipating a resolution to the Greek debt swap deal. Prices were also fueled by inflation concerns on the reported bond buying program being considered by the U.S Federal Reserve.

Gold for April delivery, the most actively traded contract, gained $14.80 or 0.9 percent to $1698.70 an ounce Thursday on the Comex division of the New York Mercantile Exchange. Gold traded at an intraday high of $1,704.80 an ounce and a low of $1,683.60 an ounce.

Yesterday, gold snapped a three-session losing streak to end up marginally higher with the dollar weakening and investors warming up to some upbeat private jobs data. Prices were also supported by news reports of the Fed considering a new bond buying program.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.201 on Thursday, down from 79.692 late Wednesday. The dollar had scaled a high of 79.78 intraday.

The euro extended gains after the European Central Bank President Mario Draghi in a press conference termed its long-term refinancing operation an unquestionable success, while indicating progress in the eurozone economy.

The euro traded higher against the dollar at $1.3262 on Thursday, as compared to $1.3154 late Wednesday. The euro had scaled a high of $1.3278 intraday with a low of $1.3136.

In economic news, new claims for unemployment insurance in the U.S. ticked up unexpectedly last week, according to figures released Thursday by the Labor Department.

The level of initial jobless claims was a seasonally adjusted 362,000 for the week ended March 3rd, up 8,000 from the previous week's revised figure of 354,000. The previous week's claims levels were upwardly revised from the 351,000 initially reported.

While most economists had predicted that new claims would hold level at the 351,000 initially reported for the previous week, the latest figure still remains comfortably below the 400,000 level that most economists believe is the threshold for lowering the overall unemployment rate.

The Bank of England today left its key interest rates unchanged at 0.50 percent and maintains bond buying program at GBP 325 billion.

The European Central Bank left its key interest rate unchanged for the third month in a row on Thursday, as expected. The Mario Draghi-led Governing Council decided to maintain the main refi rate at a record low 1 percent following its meeting in Frankfurt.

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