For the first time since March, the price of gold rose above $1,700 per ounce on hopes that the European Central Bank (ECB) would announce a plan for unlimited purchase of sovereign bonds as a means of combating the financial crisis.
Platinum was up for a fifth straight day in European trading, as problems continued at South African platinum mines, and other metals rose as well.
Bloomberg reported Thursday that optimism over ECB President Mario Draghi’s bond-buying plan led to the boost in the price of gold, which generally trades at an inverse to the U.S. dollar. The euro was up against the dollar as well, trading near a two-month high.
In early morning European trading, spot gold gained 1% to hit $1,709.90; the last time the metal came in above $1,700 for immediate delivery was back in March. December-delivery gold was up as well on the New York Comex, gaining 1.1% to reach $1,712.10.
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“The market is optimistic about the ECB’s plan to rescue the region,” said Wang Xiaoli in the report. Xiaoli, chief investment strategist at CITICS Futures Co., a unit of China’s largest listed brokerage, added, “Gold is getting a lift from the strength in the euro.”