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PRECIOUS-Gold up nearly 2 pct on stimulus hopes for US, Europe
July 25, 2012 / 4:28 PM / 5 years ago

PRECIOUS-Gold up nearly 2 pct on stimulus hopes for US, Europe

 * Hopes for U.S., European monetary easing boost gold
 * Physical demand still soft, silver ETF interest lackluster
 * Gold's premium over platinum highest since January

 (Adds new comment, updates market activity)
 By Frank Tang
 NEW YORK, July 25 (Reuters) - Gold rose nearly 2 percent on
Wednesday, outperforming equities for the third day in a row as
renewed talk of U.S. and European monetary stimulus boosted the
precious metal's appeal to investors seeking an inflation hedge.
 Bullion was poised for its biggest daily rise in a month on
speculation the European Central Bank will create new money to
fund rescue operations for troubled euro zone countries, traders
said.
 Late on Tuesday, gold got a boost from talk that the Federal
Reserve was exploring new tools to boost U.S. growth.
 
 "The gold market has been looking for any hints of any
quantitative easing program. You are seeing this big bounce
today off the fact that there could be something going on in
euroland," said Jeffrey Sherman, commodities portfolio manager
at DoubleLine Capital LP, which has $38 billion in assets.
 Options-related buying above the popular $1,600 call strike
price also lifted underlying futures ahead of Thursday's COMEX
August option expiry. In addition, technical support helped as
the metal now appears moving closer to break out of a trading
range following Wednesday's rally, dealers said.
 Spot gold was up 1.9 percent at $1,609.26 an ounce by
1:36 p.m. EDT (1736 GMT), having hit a near three-week high at
$1,609.91 earlier in the session.
 U.S. gold futures for August delivery were up $32.20
an ounce at $1,608.40, with trading volume on track to be the
strongest in over a month, preliminary Reuters data showed.
 Gold has held in a $75 range in July, its narrowest monthly
spread since April. Weak seasonal buying in top bullion
consumers such as India and China, waning inflows into
gold-backed exchange-traded funds and euro zone debt jitters
have limited price gains.
 Spain and France jointly said stability in the euro zone
needs the adoption of a single supervisory mechanism for the
bloc's banks. Also, ECB policymaker Ewald Nowotny said he could
see grounds for giving Europe's rescue fund a banking license.
  
 U.S. equities were slightly higher, with he S&P 500 stock
index paring early gains after new U.S. single-family
home sales dropped by the most in more than a year and revenues
from bellwether company Apple Inc disappointed.
 
 
 OUTFLOW FROM SILVER ETF 
 Silver rose 2.1 percent to $27.51 an ounce.
Confidence in the metal remains shaky, however, analysts said,
with investors wary of taking profits in the traditionally
volatile asset.
 The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust, posted an outflow of 69.36 tonnes on
Tuesday.
 Gold's rise also pushed its premium over platinum above $200
an ounce for the first time since January.
 Platinum group metals, which are largely used as catalytic
converters by the auto industry, underperformed gold. Spot
platinum rose 1.3 percent at $1,396.24 an ounce, while
spot palladium gained 1.3 percent to $563.75 an ounce.
 Prices at 1:36 p.m. EDT (1736 GMT)                            
 
                            LAST      NET    PCT     YTD
                                      CHG    CHG     CHG
 US gold                    1608.40    32.20   2.1%    2.7%
 US silver                   27.510    0.699   2.6%   -1.5%
 US platinum                1403.40    15.90   1.2%    0.3%
 US palladium                567.05     5.45   1.0%  -13.6%
 
 Gold                       1609.26    29.42   1.9%    2.9%
 Silver                       27.51     0.56   2.1%   -0.7%
 Platinum                   1396.24    17.99   1.3%    0.2%
 Palladium                   563.75     7.47   1.3%  -13.6%
 
 Gold Fix                   1601.00    13.50   0.9%    1.7%
 Silver Fix                   27.11    18.00   0.7%   -3.8%
 Platinum Fix               1396.00     5.00   0.4%    1.1%
 Palladium Fix               566.00     2.00   0.4%  -11.0%
 
 (Additional reporting by Jan Harvey in London; Editing by Dale
Hudson and David Gregorio)
 

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