European Central Bank's bond buying programme to rescue debt-ridden countries in the Eurozone sent gold futures soaring to their highest in nearly six months on Thursday.
Gold December futures rose $11.60 or 0.7 percent to $1,705.60 an ounce on Thursday after ECB president Mario Draghi detailed plans to buy bonds from the countries that are struggling to reduce their debt burden.
The ECB said that it would launch an outright monetary transaction program in the secondary market and would decide when to start, continue or stop its bond buying exercise.
However it came off its highs as hopes of a stimulus in the United States dwindled after positive private-sector jobs data was put out.
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Gold was very strong earlier Thursday right after Draghi spoke about the plan, but positive macroeconomic reports on the U.S. job market effectively cut gains in half, James Steel, an analyst at HSBC in New York, told MarketWatch.
The positive news was seen as cutting down on the likelihood of more stimulus being announced in the short term, Steel said.
Draghi said the program would enable the central bank “to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro.”
In the U.S. the ADP put out employment data which showed that employment gains recorded were the highest in five months. The Labour Department also said that the workers filing for unemployment benefits had fallen by 12,000 the most since July.
SPDR Gold Trust (ETF)(NYSEARCA:GLD) rose 0.59 (0.36%) to $164.90, Goldcorp Inc. (USA)(NYSE:GG) surged 1.28 (3.13%) to $42.14, Kinross Gold Corporation (USA)(NYSE:KGC) added 0.29 (3.28%) to $9.13, Yamana Gold Inc. (USA)(NYSE:AUY) climbed 0.34 (1.98%) to $17.52 and Barrick Gold Corporation (USA)(NYSE:ABX) gained 0.91 (2.39%) to $39.