* Fear of Fed rate hike pushed further into future
* S&P dives 2 pct, lower US Treasury yields help gold
* Chinese gold prices back at discount to spot
* Coming up: US producer price index Friday
(Updates market activities)
By Frank Tang and Clara Denina
NEW YORK/LONDON, April 10 Gold rose to its
highest price in more than two weeks on Thursday, boosted by a
sharp pullback in U.S. equities and follow-through buying a day
after minutes from the Federal Reserve's latest policy meeting
revealed its cautious approach in future interest-rate hikes.
Gold came uncoupled in the afternoon from U.S. equities,
stalling even as the S&P 500 index accelerated losses.
The S&P, which fell 2 percent for the day, has given back all
its gains to turn negative for the year.
The yellow metal largely ignored data signalling a stronger
U.S. job market, with the number of Americans filing new
applications for unemployment benefits tumbling last week to the
lowest level in nearly seven years.
Analysts said gold buying accelerated following Wednesday's
Fed minutes, which showed officials fretted last month that
investors would overreact to policymakers' fresh forecasts on
interest rates that appeared to map out a more aggressive cycle
of rate hikes than was actually anticipated.
"It changed the dynamic of the gold market because now the
fear of Fed raising rates has been pushed back further into the
future," said Phillip Streible, senior commodities broker at RJ
Spot gold was up 0.6 percent at $1,319.65 an ounce by
2:52 p.m. EDT (1852 GMT), having earlier hit $1,324.40, its
highest since March 24.
U.S. COMEX gold futures for June delivery settled
up$14.60 to $1,320.50 an ounce, with trading volume about 35
percent below its 30-day average, preliminary Reuters data
Gold prices had come under pressure, falling to a seven-week
low of $1,277.90 on April 1, on signs that strong U.S. economic
data could prompt further dollar strengthening and comments from
Fed Chair Janet Yellen on March 19 that interest rates could
rise in the first half of 2015.
On Thursday, U.S. 10-year Treasury yields
dropped toward 2.6 percent. Returns from U.S. bonds are closely
watched by the gold market, given that the metal pays no
Prices in top buyer China slipped back to a discount of
about $2 an ounce on London prices on Thursday from a premium in
the previous session.
Also reflecting weak physical demand, gold stocks sitting in
U.S. exchange warehouses are at a 10-month high.
Among other precious metals, silver rose 1.1 percent
to $20.07 an ounce. Platinum rose 1.4 percent to $1,455
an ounce, having earlier reached a three-week high of $1,459 an
ounce and palladium gained 1.3 percent to $788.50 an
2:52 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold JUN 1320.50 14.60 1.1 1311.00 1324.90 117,322
US Silver MAY 20.091 0.321 1.6 19.860 20.400 57,964
US Plat JUL 1460.10 21.20 1.5 1441.20 1462.00 8,693
US Pall JUN 792.30 9.75 1.2 779.90 794.50 4,225
Gold 1319.65 8.25 0.6 1311.38 1324.40
Silver 20.070 0.220 1.1 19.890 20.360
Platinum 1455.00 20.10 1.4 1443.40 1459.00
Palladium 788.50 10.20 1.3 780.35 792.50
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 122,930 196,679 182,829 15.32 -0.24
US Silver 77,204 47,540 58,405 22.66 0.35
US Platinum 8,730 15,664 12,483 17.15 -0.45
US Palladium 4,424 5,602 5,834 27.94 -1.88
(Additional reporting by A. Ananthalakshmi in Singapore;
editing by Peter Galloway and Alden Bentley)