Gold climbed to the highest price in two weeks amid speculation that central banks will take more action to spur growth, boosting demand for the metal as an inflation hedge.
Reports showed yesterday that euro-area manufacturing output contracted for an 11th straight month in June and manufacturing in the U.S. unexpectedly shrank. European Central Bank officials are forecast to cut their main interest rate to an all-time low on July 5, according to the median forecast in a Bloomberg survey of economists.
“People are expecting some form of easing both in the U.S. and Europe,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “The chatter is growing louder.”
Gold futures for August delivery rose 1.5 percent to settle at $1,621.80 an ounce at 1:41 p.m. on the Comex in New York, after climbing to $1,625.70, the highest for a most-active contract since June 19.
The metal is up 3.5 percent this year. Prices surged 70 percent from the end of December 2008 to June 2011 as the Federal Reserve kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing.
Silver futures for September delivery gained 2.8 percent to $28.28 an ounce on the Comex. Earlier, prices touched $28.445, the highest since June 20.
On the New York Mercantile Exchange, platinum futures for October delivery advanced 2.3 percent to $1,491.40 an ounce, rising for three straight sessions. Palladium futures for September delivery jumped 3.6 percent to $598.90 an ounce.
Comex floor trading will be closed tomorrow for the Independence Day holiday.