Gold Futures Soar After Fed And China Data

Gold futures surged on Thursday in Asian trading hours, as investors keyed into easing hopes spurred by minutes from the U.S. central bank’s most recent rate meeting and poor data from China.

Gold futures for December delivery GCZ2 jumped $25, or 1.5%, to $1,665.90 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange.

Gold declined $2.40, or 0.2%, to end at $1,640.50 an ounce in regular New York trading on Wednesday but reached its highest settlement since early May on Tuesday.

Fear of inflation has provided impetus for gold in recent sessions. Inflation expectations were given a fresh nudge on Wednesday after the minutes of the Fed’s policy panel, the Federal Open Market Committee, showed the agency close to a fresh round of bond buying. Read more on gold.

Weak manufacturing data from China released Thursday added impetus to calls for global stimulus efforts, with a poor reading on shipments suggesting that global demand hadn’t improved much. Read more on China data.

A weaker dollar provided an extra lift for the precious metal on Thursday, with the ICE dollar index DXY at 81.425 versus 81.475 in late North American trading on Wednesday. Read more on currencies.

Dollar-denominated commodities tend to rise on a weaker dollar, as they become more attractive to holders of other currencies.

Around the wider metals complex, copper for September delivery HGU2 rose 3 cents to $3.48 a pound, while silver for the same month SIU2 climbed 63 cents to $30.18 an ounce.

September palladium PAU2 rose $8.05 to $636.80 an ounce while October platinum PLV2 rose $31.80 to $1,558.30 an ounce.

Marketwatch