Gold Up for Third Day, Hits 1-Month High on Euro Gain
Reuters
Gold rose to a one-month high on Thursday, as comments by the president of the European Central Bank on cheap money stabilizing the region's banking system extended the metal's gain to a third consecutive day.
Bullion largely followed a rally in the euro after ECB President Mario Draghi said the bank's flood of cheap three-year loans was helping banks across the euro zone but left the door open to further interest rates cuts.
Despite Thursday's market moves, a positive correlation among gold, the euro and riskier assets has shown signs of breaking in January. In the previous two months, gold had traded in virtual lockstep with the euro.
Gold has gained around 6 percent in 2012.
"Right now, gold is operating on its own merit as a store of value," said Zachary Oxman, managing director of futures brokerage TrendMax.
"The problems in the euro zone are still there, and I believe the debt issues in Greece and Italy are not going to be alleviated at all," Oxman said.
Spot gold was up 0.4 percent at $1,646.54 an ounce by 1:22 p.m. EST, having touched a one-month high at $1,661.71.
U.S. gold futures for February delivery traded up $8.50 an ounce at $1,648.10 in decent volume.
Draghi said the ECB's bond-buying process had only just begun to achieve its aim. The euro hit session highs after his comments, boosting gold, which tends to gain as the dollar weakens.
Concerns that the euro zone economy remains mired in its debt crisis while the U.S. economy is improving have pressured the euro this year and consequently lifted euro-priced gold.
In January, gold priced in euro terms has outperformed dollar-priced gold due to a 1 percent drop in the euro versus the dollar so far this month.
SILVER EAGLE SALES UP
Demand for silver coins has been strong at the start of the year, with the U.S. Mint reporting American Eagle silver coin sales of 4.257 million ounces in January so far, already a higher volume than recorded in any of the previous three months.
U.S. Mint gold coin sales have also been healthy at 82,500 ounces so far this month, 26 percent higher than in the entire month of December.
read more on this article here
