Forexpros – Gold futures rose to a two-day high on Thursday, amid ongoing uncertainty over the euro zone’s sovereign debt crisis, while investors awaited the outcome of the European Central Bank’s policy meeting later in the day.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,651.45 a troy ounce during late Asian trade, climbing 0.6%.
It earlier rose by as much as 0.85% to trade at USD1,655.95 a troy ounce, the highest price since October 4.
The Financial Times reported late Wednesday that European bank regulators will conduct a new round of evaluations on regional banks, in an attempt to avert a shock to the region’s financial system if Greece defaults.
However, German Chancellor Angela Merkel later said that Europe’s rescue fund would only be used as a last resort to save banks and that investors may have to endure more losses as part of a Greek bailout.
Meanwhile, the ECB was widely expected to leave rates unchanged at 1.5%, amid concerns over consistently high inflation, despite calls for a rate cut to support faltering growth in the single currency bloc.
The rate decision will be followed by a closely-watched press conference by ECB President Jean-Claude Trichet, who will be heading his final interest rate meeting as ECB chief.
Strong physical demand in top consumers India and China also lent support, as the previous day’s drop to below USD1,600 an ounce spurred some bargain buying.
French lender Credit Agricole continues to favor the precious metal, saying “Given that we haven’t had any correction for months, this has brought better value to the market for people who want to get back into gold.”
In a report published Wednesday, the bank said that, “Longer term, all the factors that were bullish for gold remain intact. Currency debasement, economic imbalances, sovereign debt – the factors that were there last week are still here today.”
Elsewhere on the Comex, silver for December delivery jumped 1.62% to trade at USD30.84 a troy ounce, while copper for December delivery rallied 3.92% to trade at USD3.228 a pound.
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