Gold rallied to the highest level in more than four months on Friday, as demand for safe haven assets was boosted amid turmoil in the currency market, following the Swiss National Banks surprise policy decision to scrap its peg against the euro. On the Comex division of the New York Mercantile Exchange, gold futures for February delivery hit a session high of $1,292.40 a troy ounce, the most since September 2, before settling at $1,276.90, up $12.10, or 0.96%. A day earlier, gold surged $30.30, or 2.45%, to close at $1,264.80 an ounce. Futures were likely to find support at $1,226.10, the low from January 15, and resistance at $1,290.90, the high from September 2. On the week, gold tacked on $60.80, or 4.76%, the second consecutive weekly gain. Also on the Comex, silver futures for March delivery soared 64.8 cents, or 3.79%, on Friday to settle the week at $17.75 a troy ounce by close of trade, the most since September 24. The March silver futures contract picked up $1.34, or 7.54%, on the week, the second straight weekly advance. Gold rallied sharply after the SNB shocked the markets on Thursday, saying it would discontinue the minimum exchange rate of 1.20 per euro it imposed in September 2011. The central bank also cut interest rates deeper into negative territory, a move intended to dissuade investors from buying the franc. Lower interest rates can give gold a lift, as it decreases the relative cost of holding on to the metal, which doesnt offer investors any similar guaranteed payout.
Posted on: Mon, 19 Jan 2015 07:23:50 +0000
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