By Myra P. Saefong and Victor Reklaitis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures shifted higher Thursday as a sharp drop in the U.S. stock market helped lure investors back to the precious metal.
That offset pressure from better-than-expected jobless-claims data, which supported the prospect that the Federal Reserve will taper its bond-buying program later this year.
U.S. Mint Enlarge Image
Gold futures shift higher as U.S. equities drop.
Gold for December delivery /quotes/zigman/662680 GCZ3 +0.41% was last up $5.30, or 0.4%, to $1,338.70 an ounce on the Comex division of the New York Mercantile Exchange, rebounding after touching lows below $1,320.
“Pundits out there are touting safe haven demand, and I can’t argue with that,” said Brien Lundin, editor of Gold Newsletter. “The deteriorating situation in Egypt and the selloff in U.S. equities are undoubtedly having an effect.”
“But that effect is being exacerbated by the extreme tightness in the physical gold market,” he said. “As the recent filings have highlighted, the Western speculators sold their gold this spring, and it’s been shipped to China and elsewhere in Asia. The Asian markets are still buying, and if the Western traders want to buy gold now, they’re going to have to fight these Eastern savers for every last ounce.”
Gold futures on Wednesday climbed $12.90, or 1%, nearly recouping their loss from the previous session.
Gold prices on Wednesday reached their intraday highs “as equities declined on the day, and as events in Egypt triggered some safe-haven interest,” said Scotiabank strategist Russell Browne in a note to clients.
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