Forexpros – Gold futures traded higher during U.S. afternoon trade on Thursday, as encouraging comments from the president of the European Central Bank lifted the euro by more than 1% against the U.S. dollar.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,612.75 a troy ounce during U.S. afternoon trade, advancing 0.27%.
It earlier climbed by as much as 0.75% to trade at USD1,620.75 a troy ounce, the highest since July 5.
Gold futures were likely to find support at USD1,562.45 a troy ounce, the low from July 23 and near-term resistance at USD1,624.05, the high from July 5.
Gold futures leaped to the highest levels of the session after ECB President Draghi said earlier that the bank will do whatever is necessary to preserve the euro.
In a speech in London, Draghi appeared to indicate that the ECB would be prepared to intervene to lower Spanish and Italian bond yields, saying that government borrowing costs would fall within the central bank’s mandate if they interfered with the ‘transmission’ of monetary policy.
The yield on Spanish 10-year bonds dropped back to 6.97% from a session high of 7.38% following the remarks, while the yield on Italian 10-year bonds pulled back to 6.11% from 6.47%.
The euro surged more than 1% against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies fell 1% to trade at 82.83, the lowest since July 5.
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.
The greenback was also hit by renewed speculation over the possibility of more easing from the Federal Reserve, ahead of its policy meeting next week.
Meanwhile, the U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits fell by 35,000 to a seasonally adjusted 353,000 last week, beating expectations for a decline of 8,000 to 380,000.
Separate data showed that U.S. core durable goods orders, which exclude transportation items, fell unexpectedly in June, declining 1.1% after a 0.8% rise the previous month. Analysts had expected core durable goods orders to rise 0.1% the previous month.
The report also showed that durable goods orders rose 1.6%, beating expectations for a 0.4% increase and following a 1.6% rise in May.
Also Thursday, the National Association of Realtors said its pending home sales index fell by 1.2% in June, disappointing expectations for a 0.2% increase.
Elsewhere on the Comex, silver for September delivery gave back 0.08% to trade at USD27.44 a troy ounce, while copper for September delivery gained 0.41% to trade at USD3.388 a pound.