Gold rises on lower dollar, European uncertainty

: 0 Comment(s)Print E-mail Xinhua, June 7, 2012

Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange extended the rally on Wednesday, as traders digested news from the European Central Bank (ECB) and took advantage of a weaker U.S. dollar.

The most active gold contract for June delivery rose 17.3 dollars, or 1.07 percent, to settle at 1,634.2 dollars per ounce.

Market analysts said that the primary news of the day came from Europe, where ECB President Mario Draghi announced that the Bank would keep its lending rate unchanged at one percent.

Traders seemed to believe that the ECB still has tools left to deal with the uncertainty in Europe, which stemmed some of the bearish trends coming from the eurozone.

U.S. investors also seemed to be hoping for the Federal Reserve to introduce another round of quantitative easing, as recent macroeconomic data suggested a weaker U.S. recovery.

On Wednesday, the Department of Labor reported that U.S. worker productivity fell 0.9 percent in the first quarter, more than the initial estimate of a 0.5-percent drop. The news bolstered gold futures as it added to the hopes for more Fed quantitative easing, while the market also gained some safe-haven flows.

Silver for July delivery also soared 1.083 dollars, or 3.81 percent, to close at 29.488 dollars per ounce. Platinum for July delivery hiked 28.8 dollars, or 2 percent, to settle at 1,469.2 dollars per ounce.