Capital Gold Group Report: GOLD AND OIL RESPOND TO U.S. DOLLAR DECLINE ON RATE CUT SPECULATION
NEW YORK
(MarketWatch) -- Gold futures gained more than 3% Wednesday, heading
for the biggest one-day gain in more than five weeks, as rallies in
global stock markets and expectations of a possible interest-rate cut
in the U.S. pushed prices for commodities broadly higher.
The U.S. dollar fell sharply against the euro and the British pound on
speculation the Federal Reserve will cut its key interest rate by a
half percentage point. The weakening dollar pushed gold and other
dollar-denominated commodities higher.
Gold for December delivery rose $24.90 to $765.40 an
ounce on the Comex division of the New York Mercantile Exchange,
rallying 3.4% -- its biggest daily percentage gain since Sept. 22.
Also in metals, the
benchmark silver contract jumped 13%. Copper, a metal seen as an
economic barometer, moved up 8%, rebounding for a third day from its
three-year low.
"Recent movements in both the equity and currency markets suggest some
risk appetite is beginning the return," said TheBullionDesk.com analyst
James Moore in a note to clients.
"This, coupled with the fact gold is considerably lower than at the start of the year and investors may look to further diversify their asset holdings, may allow gold to begin recouping some of its losses," he wrote.
"This, coupled with the fact gold is considerably lower than at the start of the year and investors may look to further diversify their asset holdings, may allow gold to begin recouping some of its losses," he wrote.
Gold's gains coincided
with broad rallies in other commodities, including crude oil's surge of
more than 6%. The Reuters/Jefferies CRB Index, a benchmark gauging the prices of major commodities, jumped 3.9%.
Fed Decision
Helping boost commodities, the U.S. dollar weakened ahead of the Fed
decision, due at 2:15 p.m. EDT. The dollar index which tracks the value
of the greenback against other major currencies, lost 1.4%. A weaker dollar tends to increase investors' demand for gold as an alternative investment.
Also boosting commodities, stocks rallied around the world. Following a
sharp rise in U.S. stocks Tuesday, markets made major gains in Asia and
Europe on Wednesday. U.S. stocks erased earlier losses, trading higher.
In gold spot trading,
the London gold-fixing price -- used as a benchmark for gold for
immediate delivery -- stood at $764 an ounce Wednesday afternoon local
time, up $33.50 from Tuesday afternoon.Capital Gold Group, gold group, gold, gold prices, gold news, gold coins, gold bullion, gold IRA, IRA gold
