Gold futures made a rapid increase in stock prices, the most in a week on rumors that the Federal Reserve will continue bond purchases to strengthen the U.S. economy, improving demand for the yellow metal as a store of value. Silver as well increased.
The Commerce Department said today U.S. gross domestic product stretched at an annual rate 2.4% in the first quarter. Early jobless claims increased 10,000 to reach 354,000, exceeding the 340,000 forecast. The USD dropped for a second day in contradiction of the other main currencies
Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a phone interview “Today’s data is an indication that the economy has not fully recovered, and so the Fed will not end its stimulus in a hurry” and added “Also, a weaker dollar helps.”
August gold futures delivery rose by 1.4% to reach $1,411.90 an ounce at 9:35 a.m. on the Comex in New York, moving towards the largest gain since May 23.
According to data gathered from Bloomberg, trading was 49% higher than the regular for the past 100 days at this time of day.
Fed Chairman Ben S. Bernanke said May 22 that the central bank might lower its $85 billion of monthly debt purchases if the economy displays continuous marks of improvement.
Gold declined by 17% this year through yesterday and moved in a bear market last month as equities made a rapid increase, the USD strengthened and among fear that the Fed might lower the pace of its stimulus measures.