October 24, 2013 / 10:02 AM / 4 years ago

PRECIOUS-Gold up 1 pct, above $1,350/oz, after U.S. jobless claims

4 Min Read

* Gold at one-month high on hopes Fed to keep stimulus
    * US gold futures open interest at two-month high
    * Bullion breaks above 50-day moving average resistance
    * Coming up: US durable goods, consumer confidence Fri.


    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Oct 24 (Reuters) - Gold rose 1 percent on
Thursday, breaking above $1,350 an ounce for the first time in
more than a month, on rekindled buying prompted by expectations
the Federal Reserve will continue its monetary stimulus due to
disappointing U.S. jobless claims data.
    Bullion prices rallied after the number of Americans filing
new claims for unemployment benefits fell less than expected
last week. 
    Technical buying also lifted gold after it breached key
resistance at its 50-day moving average. Also, analysts cited a
two-month high in the open interest for U.S. gold futures, a
liquidity gauge, for bullion's gains.
    "With open interest in gold growing, it indicates new
business is not just because of short covering, and that gold
buyers may keep a steady course," said George Gero, vice
president of RBC Capital Markets.
    Spot gold rose 1 percent to $1,345.70 an ounce by
3:43 p.m. EDT (1943 GMT), having earlier hit $1,351.61, its
highest since Sept. 20. 
    U.S. gold futures for December delivery settled up
$16.30 an ounce at $1,350.30, with trading volume about 20
percent below their 30-day average, preliminary Reuters data
shows.
    A two-week U.S. government shutdown this month increased
expectations that the U.S. central bank will delay reducing the
size of its $85 billion monthly bond-buying stimulus until next
year, supporting gold prices. 
    Heavy positioning in the Comex November $1,400 call options
could provide upward pressure for bullion prices.
    "The $1,400 (call options) have the largest open interest by
far, with almost 1.9 million ounces. This could prove a magnet
for spot should we continue to rally," TD Securities precious
metals trading desk said in a note.
    Gold was also underpinned by a weaker U.S. dollar and by
U.S. Treasury bond yields hovering near a three-month low after
the weekly jobless claims data.  
    Positive manufacturing data from China, the world's
second-largest gold consumer, also helped support gold prices on
Thursday, traders said. 
    In research news, Goldman Sachs said it expects gold prices
to fall to $1,144 an ounce in 2014, driven by improving U.S.
economic data, rising real rates and the commencement of
tapering of U.S. monetary stimulus. 
    Among other precious metals, silver was up 0.8
percent at $22.67 an ounce, while platinum also rose 1.1
percent to $1,445.75 an ounce and palladium inched down
0.1 percent to $743.47 an ounce.
    Platinum group metal investors are now digesting news that a
powerful mine worker union in South Africa has been granted
permission by a government mediator to call a strike against
Impala Platinum, the world's second largest platinum
producer.
 3:43 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1350.30  16.30   1.2  1330.20 1352.30  124,001
 US Silver DEC  22.822  0.205   0.9   22.510  22.910   30,491
 US Plat JAN   1456.20  16.60   1.2  1431.90 1457.50    7,608
 US Pall DEC    747.80   1.70   0.2   742.50  751.05    3,966
                                                              
 Gold          1345.70  13.96   1.0  1330.88 1351.61         
 Silver         22.670  0.180   0.8   22.520  22.850
 Platinum      1445.75  15.45   1.1  1435.75 1452.49
 Palladium      743.47  -0.53  -0.1   745.77  748.00
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        129,740   162,049   190,172     20.22   -0.15
 US Silver       32,020    44,629    55,982     29.97   -0.89
 US Platinum      7,652    14,314    13,019     20.33    0.00
 US Palladium     4,280     3,946     5,666

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