SAN FRANCISCO (MarketWatch) — Gold futures on Thursday ended at their highest level in nearly seven months after U.S. Federal Reserve officials detailed another round of large-scale bond purchases to boost the U.S. economy.
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Gold for December delivery /zigman2/quotes/210039517/delayed GCZ22 -0.33% rose $38.40, or 2.2%, to settle at $1,772.10 an ounce on the Comex division of the New York Mercantile Exchange.
In electronic trading later Thursday, gold moderated gains, recently trading at $1,768.30 an ounce.
The metal had changed hands around $1,728 an ounce moments before the Fed announcement.
Thursday’s settlement was gold’s highest since late February, and the largest one-day percentage increase since late June. Gains for the week approached 4%, while the metal has gained 5% for the month.
Fed officials detailed a plan to buy $40 billion of agency mortgage-backed securities each month, starting Friday. The Fed kept in place Operation Twist, under which it sells short-dated debt and reinvests the proceeds in longer-term securities.
Fed officials also extended its pledge to keep interest rates exceptionally low from late 2014 to “at least through mid-2015,” according to the statement.
Trading was quiet ahead of the Fed, with some worries that if investors quantitative-easing hopes were foiled gold could lose $20 to $30 per ounce. Much of the hopes were seen as priced in.
Gold benefits from quantitative easing measures as it is viewed as a safe store of value. The metal also benefits from fears of currency debasement when liquidity is added to markets.
Silver and copper futures also saw a boost from the Fed bond-purchase plan, with prices turning higher after the news. Platinum and sister metal palladium added to gains.
Copper for December delivery /zigman2/quotes/210059544/delayed HGZ22 +0.97% advanced 2 cents, or 0.5%, to settle at $3.71 a pound.
Silver futures /zigman2/quotes/210319410/delayed SIZ22 +2.18% for the same month gained $1.49, or 4.5%, to $34.78 an ounce.
Platinum for October delivery rose $29.90, or 1.8%, to settle at $1,679.50 an ounce.
Higher prices for platinum and palladium have been supported by fears of more labor strife in South Africa, the top producer of the two precious metals.
Platinum rallied nearly 3% in the previous session, boosted by the supply concerns. Miners have called for a general strike to start Sunday in the city of Rustenburg, the heart of the platinum mining industry.
Anglo American Platinum Ltd. /zigman2/quotes/204578911/delayed ZA:AMS -4.31% , platinum’s top producer, suspended operations Wednesday in its Rustenburg mines. Last month, more than 30 people were killed in a confrontation between police and rival union members at a mine owned by Lonmin PLC .
December palladium gained $9.70, or 1.4%, to $689 an ounce.