Forexpros – Gold prices rose Thursday in choppy trading, brushing off earlier losses in European sessions as investors decided a European Central Bank loan tender fell short of what the continent needs for more lasting financial and economic recovery.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,614.25 a troy ounce early Asian trading, up 0.04%.
Gold futures were likely to test support at USD1,595.45 a troy ounce, Tuesday’s low, and resistance at USD1,643.65, Wednesday’s high.
The European Central Bank loaned EUR489.19 billion to 523 eurozone banks with the aim of facilitating lending and easing the credit crunch there.
While the move drew an initial applause, analysts later concluded such financing won’t solve the continent’s fundamental problems, which prompted a run to the dollar.
Eventually, however, investors traded up some of those dollars for gold as they sought different ways to avoid the euro.
“Gold has been trading like a risk asset, along with other metals, and trading on the dollar-euro exchange rate,” said Citigroup analyst David Wilson, according to Reuters.
“The underlying issues, in terms of the macro environment, remain fragile. Europe is going to be in recession next year, the U.S. maybe will see modest growth, and China (is) slowing. That is still positive for gold.”
Elsewhere on the Comex, silver futures for March delivery were up 0.12% and trading at USD29.283 a troy ounce, while copper futures for March were down 0.39% at USD3.378 a pound.
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