Forexpros – Gold prices rose on Thursday after reports emerged that the International Monetary Fund was considering boosting its lending capacity by as much as $500 billion should troubled European nations need more financing.
The news sent the euro firming and the dollar weakening, and a weaker dollar is often bullish for the yellow metal.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,662.35 a troy ounce, up 0.15%.
Gold futures were likely to test support at USD1,643.15 a troy ounce, Wednesday’s low, and resistance at USD1,662.95, an earlier session high.
On top of hopes for greater IMF assistance, Greece appears to be getting closer to working out a restructuring deal with private creditors, which further bolstered the euro.
Traders warned, however, that any snags in Europe’s progress could send the euro falling, the dollar rising and gold reversing its gains.
“If the European situation doesn’t get resolved, which has been priced into the market, we could be right back to asset-allocation type selling in a fairly short order,” said Frank McGhee, head precious metals trader at Integrated Brokerage Services, according to Reuters.
Elsewhere on the Comex, silver for March delivery was down 0.06% and trading at USD30.525 a troy ounce, while copper for March delivery was up 1.09% to trade at USD3.806 a pound.
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