METALS STOCKS Gold soars nearly 3% to trade above $900 an ounce
By Polya Lesova, MarketWatch Last update: 10:50 a.m. EST Jan. 24, 2008Print E-mail RSS Disable Live Quotes NEW YORK (MarketWatch) -- Gold futures surged nearly 3% to trade above $900 an ounce on Thursday, as traders' appetite for the precious metal was boosted by a recovery in U.S. stocks and rising crude-oil prices. Gold for February delivery rose $24.40, or nearly 3%, at $907.50 an ounce on the New York Mercantile Exchange. "Gold prices are higher on the back of firmer oil price and bargain hunting after the sell-off this week," said analysts at Action Economics. "Bullion was hit by investors selling gold to cover losses from the sale of equities, but with stock markets rebounding gold prices are firming again." On Wednesday, gold futures dropped $7.20 to end at $883.10 in a very volatile trading session. "Given the turmoil across the financial markets, it's not surprising to see the precious metals remain extremely volatile as some investors cash in their positions to generate cash while others will look favorably upon gold as a safe-haven asset," said James Moore, a metals analyst at TheBullionDesk.com, in a research note. Moore pegged technical support at $876 to $868 while resistance is expected at $890 to $900. Peter Grandich, editor of The Grandich Letter, said: "Despite an onslaught of bearish forecasts and attempts to cap the market, gold continues to demonstrate it remains in a secular bull market. $1,000 is not a question of if, but when?" On the currency markets, the dollar was down against most major counterparts, pressured by weaker-than-expected existing-home sales data. See Currencies. The dollar index, which tracks the performance of the greenback against six other major currencies, dropped 0.7% at 75.850. Dollar weakness typically boosts gold prices. On Wall Street, U.S. stocks gained on the heels of the prior day's late-session jump, with the equities market bolstered by a decline in weekly jobless claims and positive earnings from AT&T Inc., Nokia Corp. and Lockheed Martin Corp. See Market Snapshot. Also on Nymex, other metals prices rose sharply. March silver soared 36 cents, or over 2%, at $16.330 an ounce and March copper rose 11.30 cents, or nearly 4%, to $3.1850 an ounce. Crude-oil futures rose 1%, as the Energy Department reported that US crude inventories rose by 2.3 million barrels in the latest week. See Futures Movers. Metals stocks surge Indexes tracking mining and metals shares rose on Thursday. The Philadelphia Gold and Silver Index (XAU:phlx gold silver index capital-weight News, chart, profile, more Last: 182.91+7.26+4.13%
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