Silver, platinum and key base metals, including copper, inch up; crude falls
Gold edged up on Wednesday on a drop in the dollar ? after the US Federal Reserve officials allayed fears of an early rollback of the central bank’s stimulus programmes ? and robust Chinese purchases. Copper, too, hit a two-week high in intraday trade although swelling stockpiles of gasoline in the US drove down crude oil.
New York Federal Reserve Bank president William Dudley and St Louis Fed chief James Bullard said on Tuesday that they would support trimming the bond purchase programme only after further economic progress was made. The dollar weakened by 0.1% against a basket of currencies on Wednesday, making the greenback-denominated commodities, including gold, cheaper for buyers using other currencies. Moreover, the continuation of easing measures would augur well for gold as easy money tends to stoke inflationary pressures, and the precious metal is traditionally construed as a hedge against price rise.
Spot gold rose 0.7% at $1,384.91 by 0943 GMT, reversing a 1.3% losses on Tuesday. US June gold futures gained 0.5% at $1,383.80 an ounce. The metal lost ground on eight sessions out of the past nine and hit $1,338.95 on Monday, its meanest since April 16, when it posted the worst daily loss in 30 years. Investors now await Fed Chairman Ben Bernanke’s testimony to Congress at 1400 GMT on the state of the world’s largest economy for indications of stance on monetary easing.
Meanwhile, strong demand from China, the world’s second-biggest gold consumer, propped up the metal.
Tracking the gold rally, silver, too, rose 0.9% to $22.59 an ounce after hitting a two-and-a-half-year low earlier this week. Platinum and palladium gained 0.5% each at $1,464 an ounce and $746.97 an ounce, respectively.
Key base metals, too, inched up intraday. Copper rose on depreciation in the dollar and uncertain production prospects at the world’s second-largest copper mine in Indonesia after a tunnel collapse. Three-month copper on the London Metal Exchange gained 1% to $7,447 per tonne by 0943 GMT, after hitting $7,479, its loftiest since May 8.
However, crude oil dropped after the American Petroleum Institute said on Tuesday that US gasoline inventories swelled by 3 million barrels last week, suggesting the fuel market in the world’s largest user would be well supplied during the peak season.
Brent crude tumbled 60 cents to $103.31 per barrel by 1120 GMT on Wednesday, after falling by nearly a dollar in the previous session, and US crude oil shed 60 cents to $95.58.
