Gold rises as ECB comment boosts easing hopes

Gold Bullion from the American Precious Metals Exchange (APMEX) is seen in this picture taken in New York, September 15, 2011.

NEW YORK (Reuters) - Gold rose for a third session on Thursday, boosted by hopes of more monetary easing after European Central Bank President Mario Draghi pledged to do whatever was necessary to protect the euro zone from collapse.

The precious metal broke above its 100-day moving average for the first time since May 1. Options-related buying also helped boost underlying gold futures as COMEX August options have expired at Thursday's market close.

Bullion climbed nearly 1 percent, lifted by a rally on Wall Street after Draghi's remarks reassured investors, who already expect the U.S. Federal Reserve to explore new tools to boost the sluggish economy.

"Fundamentally, gold is definitely improved big time this morning because of comments by Draghi to save the euro, which basically means he's going to print money," said Adam Sarhan, chief executive of Sarhan Capital. "If he prints money, that means gold is going higher."

"Right now gold is testing resistance. If we can break above it, we will get another leg higher," said Sarhan. He added that gold is approaching a key inflection point at $1,660 an ounce based on a downward-sloping curve connecting recent highs on weekly charts.

Spot gold was up 0.7 percent at $1,615.44 an ounce by 3:13 p.m. (1913 GMT), having earlier reached a three-week high at $1,621.41.

U.S. gold futures for August delivery settled up $7 an ounce at $1,615.10, with trading volume more than 50 percent above its 30-day average, preliminary Reuters data showed. The higher-than-usual volume was partly skewed by option expiration.

On charts, gold's second days of sharp gains helped it get closer to breaking above a broad trading range in the past three months.

CitiFX strategists said in a note gold is underpinned by a bullish double-bottom pattern and its next target is near $1,800 an ounce after clearing good resistance at $1,688 an ounce.

Sharper appetite for risk and a one-percent loss in the dollar versus the euro as a result of the Draghi comments also boosted buying of U.S. equities and other commodities, and that underpinned gold. The S&P 500 index .SPX rose about 1.5 percent.

SPDR GOLD ETF POSTS OUTFLOW

HSBC analyst James Steel said that gold investors are now looking ahead to Friday's second-quarter U.S. GDP data. Gold may take its next cue based on expectations of Fed stimulus and movements in the U.S. dollar and equities markets after the economic indicator.

However, bullion's demand from the investment and physical sectors continued to remain weak. Gold buying from India, one of the top bullion consumers, was still soft as a near-record low rupee curb buying due to the high price of gold in rupees.

The world's largest gold-backed exchange-traded fund SPDR Gold Trust reported a 2.1 tonne outflow on Wednesday. The fund saw its biggest weekly outflow of physical metal this year last week.

Silver climbed 0.7 percent to $27.50 an ounce, while platinum was up 0.8 percent at $1,402.74 an ounce and spot palladium rose 0.7 percent to $565.99 an ounce.

(Additional reporting by Jan Harvey in London; Editing by Andrew Hay and David Gregorio)