Gold futures climbed on Thursday, poised to score a third straight session gain, as strength in the euro in the wake of the European Central Bank’s decision to leave its policy unchanged pressured the U.S. dollar.
The European Central Bank left its policy unchanged at minus 0.5% and its refinancing rate at 0%, while reaffirming it plans to leave rates at present or lower levels until inflation rises to converge with its target at 2%.
In a news conference, ECB President Christine Lagarde said the Governing Council “extensively” discussed the recent strength of the shared currency, but reiterated that the bank doesn’t target the exchange rate. A Bloomberg report, meanwhile, said that members of the council had agreed to not overreact to euro strength.
“The ECB has confirmed that there is no further need for additional help,” said Naeem Aslam, chief market analyst at AvaTrade, in a market update. “For traders, the ECB’s confidence in the Eurozone’s economy is a good thing and this is the reason that we have seen the EUR/USD moving higher.”
In Thursday trading, the euro EURUSD, 0.86% traded at up 0.8% at $1.19, but that helped pull the ICE U.S. Dollar Index DXY, -0.47% down by 0.5% to 92.802. A weaker dollar can provide support for assets priced in greenback, making them less expensive to overseas buyers.
December gold GCZ20, 0.85%GC00, 0.86% was up $18.60, or 1%, at $1,973.50 an ounce, following gains in each of the last two sessions.
December silver SIZ20, 1.87%SI00, 1.87% traded 54 cents, or 2%, higher at $27.62 an ounce after climbing 0.3% in the previous session.
In U.S. economic news Thursday, the number of American who applied for unemployment benefits through state and federal programs in the week ended Sept. 5 was unchanged at a seasonally adjusted 884,000, the Labor Department said. Still, continuing jobless claims, the number of people already receiving benefits rose by 93,000 to a seasonally adjusted 13.39 million in the seven days ended Aug. 29.
“The mixed bag of economic data confirms that there is gradual recovery for the U.S. economy,” said Aslam. “However, things are not improving and this is the reason that we are seeing improvement in the gold price. It is likely that the bottom is in for the gold price and it is likely to continue to move higher.”
Other metals traded on Comex also moved higher Thursday. December copper HGZ20, -0.02% traded at $3.0545 a pound, up 0.1%. October platinum PLV20, 1.85% added 2% to $943.50 an ounce and December palladium PAZ20, +1.02% climbed 1% to $2,342 an ounce.
A woman wearing a dress made of cash, Germany, 1923.
THESE are the shocking images that reveal the full horror of hyperinflation in post Great War Germany ñ when money was literally worthless. In 1923, Germany was hit by one of the worst cases of hyperinflation in history, with 4.2 trillions marks worth just one American dollar. This out-of-control inflation began somewhat mildly during World War I, as the German government printed unbacked currency and borrowed money to finance military expenditures. The strategy was to pay off the debts by seizing resource-rich territories and imposing reparations on the vanquished Allies. But when Germany lost the war and ended up with massive debts, including huge reparations to be paid to the Allies under the Treaty of Versailles. The country found themselves in economic crisis and increasingly unable to afford the hefty reparation payments.
... SEE COPY ... PIC BY NEWS DOG MEDIA ... 0121 517 0019
Reserve Your Free Step-by-Step GuideLearn Why Everyone Should Own Real Gold & Silver
INSIDE THIS INVESTMENT GUIDE YOU WILL LEARN: • How Gold & Silver can protect your savings & retirement accounts • Types of Gold & Silver products available for Home Delivery • How a Gold & Silver IRA can protect your Retirement account