Bright day for bullions

GOld hits a three-week high on Thursday

It was bright day for bullions on Thursday, 09 October 2014 at Comex. Gold prices ended the U.S. day session with solid gains and hit a three-week high on Thursday. Prices did back down from the early gains to close near the middle of the day's trading range. A combination of heavy short covering in the futures market, bargain hunting and safe-haven buying boosted the yellow metal.

December Comex gold was last up $19.60 at $1,225.70 an ounce.

December Comex silver last traded up $0.376 at $17.44 an ounce.

The big sell-off in the U.S. stock market on Thursday added to the safe-haven demand for gold. Traders were still digesting the dovish Federal Reserve Open Market Committee (FOMC) minutes released on Wednesday. The Fed expressed increasing concern about weakening world economies and some FOMC members questioned whether the appreciation of the U.S. dollar against the other major currencies might act as a drag on the U.S. economy. The market place reckons the FOMC minutes hint the Fed may have to hold off longer on raising U.S. interest rates, given the increasing concerns about weakening world economiesespecially the serious weakness coming out of the European Union.

Importantly, the FOMC minutes also suggested the Fed is worried about the recent appreciation of the U.S. dollar curtailing U.S. economic growth. The U.S. dollar index sold off overnight on the FOMC news, but rallied during the U.S. day session as the U.S. stock market sold off.

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