Gold Ticks Up Ahead Of German Ruling, Fed
Gold futures edged higher during Asian hours Wednesday, ahead of a court decision in Germany and amid growing expectations for fresh monetary measures from the U.S.
Gold for December delivery GCZ2 rose $2.90 to $1737.70 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange.
The precious metal has gained for three of the past four sessions and is up 2.8% so far this month.
The advance came ahead of this week’s Federal Reserve policy meeting. Recently, expectations have increased that the Fed will announce more bond buying to support the U.S. economy Thursday at the end of its two-day meeting.
Gold has a traditional role as a store of value and thrives on fears of currency debasement and inflation.
“With the market’s main focus on this week’s [Fed] meeting … prices were buoyed by a stronger euro,” said strategists at HSBC.
”The euro is being supported by an increase in bullish sentiment stemming partly from expectations of a positive ruling on the legality of the European Stability Mechanism by the German Constitutional Court and European Central Bank bond buying,” HSBC said.
The German court ruling on the euro zone’s bailout fund is set to take place later in the global trading day Wednesday. Read more on upcoming German court decision.
Barclays Capital strategists agreed, saying: “The majority of legal experts in Germany believe the new laws for the European Stability Mechanism and the Fiscal Pact will pass their constitutional checks.”
“For the most … the new ESM is very similar to the existing European Financial Stability Facility,” they said, referring to a bailout mechanism which Germany has already deemed legal.
Elsewhere in the metals complex, copper for December delivery HGZ2 traded flat at $3.70 a pound. while December silver futures SIZ2 climbed 11 cents to $33.67 an ounce.
Platinum for October delivery PLV2 rose $3.10 to $1610.10 an ounce, and the December contract for palladium PAZ2 slipped $4.40 to $670.50 an ounce.
Marketwatch
