Gold Trading at 3-Month High on Options Expiry, "Light Asian Selling", as Crude Oil Breaks Euro-Record

PRECIOUS METALS rose across the board Thursday morning, extending yesterday's sharp jump in New York trade, with Gold Trading at its highest Dollar price since mid-November.

The quantity of physical gold held to back the $70 billion SPDR Gold Trust (GLD) last night remained unchanged, however, from both Wednesday morning and a week ago.

Today marks expiry for March options on US Gold Futures, with the bulk of interest between $1750 and $1800 per ounce.

"The outlook remains bullish with a further gap up today," says a London dealer today, noting the Dollar-price jump above $1780 seen at the start of European Gold Trading.

"[Relative strength] is confirming the trend," said last night's chart analysis from Scotia Mocatta, adding that other technical indicators have given a "buy signal" and saying "There is good support at 1749.

"The next [Dollar Gold Price ] target is 1803, the November high."

But Wednesday's late "move higher was accompanied by light physical selling," says Standard Bank's commodity note today, "which was extended by participants in Asia."

"At this price level, most buying is from funds and investors, and there is very little buying on the physical side," agrees a Hong Kong gold trader, speaking to Reuters.

European stock markets held flat Thursday morning after Asian equities dropped 0.5% and Brent crude oil – the European benchmark – rose to 9-month highs above $124 per barrel.

Priced in Euros, Brent crude today jumped to new all-time highs above €93 per barrel, even as the Euro jumped to an 11-week high above $1.33.

The Gold Price in Euros meantime recorded an AM London Fix of €1334 per ounce (€42,889 per kilo) – a price beaten on only four trading days last September, and once again at the start of this month.

"The current February high at €1339 remains in focus," says the latest technical analysis from Axel Rudolph at Commerzbank.

"Should it be surpassed, a rise towards last year's all-time high at €1359 should be seen."

Longer-dated government bonds meantime ticked lower in price, nudging 10-year US Treasury yields back above 2.0%, after Germany reported better-than-expected business sentiment.

UK mortgage-lending and wholesale business also pointed higher, while the giant Royal Bank of Scotland – four-fifths owned by the state after near-collapse in 2008 – reported a £2 billion loss for 2011 ($3.1bn), more than half of which came from writing down the value of Greek government bond holdings.

Bullion banks Trading Gold in British Pounds today held the price above £1130 per ounce, breaking November's high and barely 5% below the sharp spike to all-time records of September 2011.

"There is always a case to be made for gold," a Singapore gold trader told Reuters earlier, "as long as the central banks keep taking new easing measures, or keep indicating they will take more new measures down the road."

Dallas Fed president Richard Fisher again repeated on Thursday that he didn't agree with the latest round of Quantitative Easing in the United States, telling CNBC that the Federal Reserve's latest policy comments were "talking down the economy".

New jobless claims in the United States last week showed no change from the week before, new data said today.

Continuing claims over the last month have averaged their lowest level since March 2008, according to Reuters.

"Base metals have been exceptionally quiet, with thin volumes and narrow intraday ranges being seen right across the complex," says Thursday's note from Standard Bank in London.

Silver Prices rose alongside gold and the other precious metals this morning, but held below $35 per ounce, some 30% off April 2011's record highs.

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