Gold futures rose on Thursday, heading to their highest level since mid-July as a softer U.S. dollar and uncertainty following a stock-market rout underpinned bids in bullion. Investors also will watch for comments from Europe’s central bank which could hold sway over a jittery market.
December gold GCZ8, +0.20% rose 0.4% at $1,235.40 an ounce, after falling 0.5% in the previous session. Thursday’s early climb placed the yellow metal back near the highest level for a most-active contract since mid-July, according to FactSet data.
December silver SIZ8, -0.11% meanwhile, added 8 cents, or 0.6%, to $14.765 an ounce, after it closed 0.8% lower in the session before.
A popular measure of the ICE U.S. Dollar Index DXY, +0.18% was down 0.1% at 96.345 after climbing firmly on Wednesday. A weaker dollar can make gold more attractive to foreign buyers.
A downturn in U.S. stocks has also helped to reassert gold’s traditional haven status after a period of lackluster action in the precious metal.
On Wednesday, the Dow Jones Industrial Average DJIA, +1.04% fell 606 points, the S&P 500 SPX, +1.37% dropped 3.1%, while the Nasdaq Composite Index COMP, +2.35% shed 4.4%, putting the index more than 10% below its Aug. 29 all-time high, meeting the widely used definition of a market correction. Both the S&P 500 and the Dow erased their year-to-date gains for 2018.
“The crash of U.S. indices has given further fuel to gold,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades in a Thursday research note.
However, he cautioned that gold could lose momentum if stocks manage a resurgence. “This correction hasn’t yet impacted the short term trend which remains positive after the weakness of stock markets, although a further decline below $1,220 could be seen as a negative signal,” he wrote.
Looking ahead, investors are awaiting European Central Bank President Mario Draghi’s latest policy update, though he will likely reaffirm a plan to wind down quantitative easing in December and reiterate no rate increases until next summer.
An updated statement from the eurozone central bank will come out at 7:45 a.m. Eastern Time (or 12:45 p.m. BST) and will be followed by a news conference at 8:30 a.m. Eastern.
