Chinese Premier Li Keqiang is seeking to build trust with India on his first foreign trip since taking office, which comes just a few weeks after a military standoff between the Asian giants on their ill-defined border in the Himalayan mountains. Full Article | Slideshow
Confused while buying stocks? Get buy, sell or hold recommendations from VantageTrade. Full Coverage
Gold hits 11-month high; $1,800 now in sight
LONDON (Reuters) - Gold shot to its highest since last November on Thursday, with sights set firmly on the psychologically key $1,800 per ounce level, as the European Central Bank elected to keep interest rates at ultra low levels.
A broadly stronger euro kept its firm tone - and supported bullion - after ECB president Mario Draghi said the bank's debt-buying plan had reduced tensions, even though economic growth remained weak.
Also, a mildly positive U.S. private sector employment report on Wednesday was keeping Friday's U.S. non-farm payrolls report in sharp focus as markets checked odds for an upside surprise.
Spot gold was up 0.6 percent at $1,787.74 per ounce, having earlier hit an 11 month high at $1,794.40. U.S. gold futures gained 0.6 percent to $1,789.60.
On the crosses, gold priced in rand hit a record high
Dealers said the supportive low interest rate environment and backdrop of further monetary stimulus made further price gains inevitable.
"The question is of when rather than if we break out," said Simon Weeks, director of precious metal sales at ScotiaMocatta.
"We've made about three highs in the low $1,790s. It needs to close above this resistance in the low to mid 90s, if we close above there, the next resistance is $1,815," he added.
The European Central Bank kept its main interest rate unchanged at 0.75 percent, while the Bank of England kept policy on hold at a record low 0.5 percent and its quantitative easing policy intact.
CAUTION ON PAYROLLS
Traders are likely to stay cautious ahead of the release of the all-important U.S. non-farm payrolls report on Friday. Data on Wednesday showed a surprise jump in private employment in the world's largest economy.
But the private-sector report did little to alter the view that the Federal Reserve will keep interest rates low until it sees signs of substantial economic progress. The Fed last month announced a third round of asset buybacks, or quantitative easing (QE3).
"With the Fed now focusing more intensely on US employment data, a poor result would sufficiently re-energise the gold market's attempts to push higher and help get past the $1800 psychological mark," UBS analyst Edel Tully said in a note to clients.
Investor interest in gold remained buoyed, as holdings of gold-backed exchange-traded funds had inched up to 74.152 million ounces by October 2, just off a record high of 74.288 million ounces hit in late September.
"Gold is well supported as new money keeps entering the market in the new quarter," said a Tokyo-based trader.
Spot platinum was 1.1 percent higher at $1,699.4, in an eighth straight session of gains, supported by spreading labour strife in South Africa that has already forced a halt in production at top producer Anglo American Platinum's Rustenburg mines, and also affected some gold mines.
Spot silver rose 0.7 percent to $34.78, while palladium added 2 percent to $662.00 an ounce, chasing the positive tone in platinum.
(Additional reporting by Clare Hutchison in London and Rujun Shen in Singapore; editing by Keiron Henderson)
- Tweet this
- Share this
- Digg this