Forexpros – Gold futures regained strength on Wednesday, as ongoing concerns over the euro zone’s debt crisis and strong physical demand in Asia underpinned prices.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,674.75 a troy ounce during late Asian trade, climbing 0.83%.
It earlier rose by as much as 0.98% to trade at a daily high of USD1,676.55 a troy ounce.
Slovakia’s parliament on Tuesday rejected a plan to boost the size of the European Financial Stability Facility, the region’s bailout fund, further adding to worries over the ongoing debt crisis in the euro zone.
The vote also toppled the government of Prime Minister Iveta Radicova after she turned the measure into a confidence motion.
The country is the last of the 17-member bloc which has yet to support the expansion of the EFSF, which needs to be approved by all euro zone states for it to go active.
Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk.
Meanwhile, strong physical demand for the precious metal in Asia supported prices. In top buyer India, consumers increased purchases of bullion ahead of the gold-buying wedding and festival season due to start in late October.
The Bombay Bullion Association, an industry group, said earlier that India’s gold demand could reach a record level of 1,000 metric tons this year, citing an expected surge in demand during the upcoming festival season.
Prithviraj Kothari, president of the Bombay Bullion Association said that he expects demand to pick up “significantly” around Diwali, the Hindu festival of lights on October 26, considered the most auspicious period for buying gold.
Swiss lender UBS added that, “Over the last couple of years, the two weeks leading to Diwali brought overall buying that was consistently above average – even twice the weekly average – despite rising prices.”
Elsewhere on the Comex, silver for December delivery rose 0.84% to trade at USD32.26 a troy ounce, while copper for December delivery climbed 1.15% to trade at USD3.328 a pound.
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