Hefty gains for bullions

Slumping dollar and continued tension in Iraq push up prices

Bullion prices ended with hefty gains on Thursday, 19 June 2914. Gold prices pushed above $1,300 on Thursday, propelled by continued tension in Iraq and signals from Federal Reserve Chairwoman Janet Yellen that short-term rates can be held steady for a while longer.

Gold for August delivery jumped $41.40, or 3.3%, to settle at $1,314.10 an ounce on the Comex division of the New York Mercantile Exchange.

July silver added 87 cents, or 4.4%, to end at $20.65 an ounce.

Safe-haven buying amid risk aversion in the market place and a slumping U.S. dollar index were featured Thursday. The civil war in Iraq remains a major market factor and continues to prompt risk aversion among traders and investors, and in turn safe-haven buying in gold.

Traders and investors on Thursday were still digesting Wednesday afternoon's Federal Open Market Committee meeting statement and a press conference from Fed Chair Janet Yellen. Most traders expected the FOMC announcement that it would continue to taper its monthly bond-buying program, also called quantitative easing, by another $10 billion. Markets took the FOMC statement in stride, but Yellen's comments at her press conference rallied stock, bond and the precious metals markets.

The U.S. dollar index saw selling pressure and hit a four-week low on Thursday in the wake of the dovishly construed comments from Yellen. Meantime, crude oil prices are higher and hovering near their recent multi-month highs. These two key elements were in a daily bullish posture for the precious metals Thursday.

Among economic data expected at Wall Street on Thursday, initial claims for the week ending 14 June dipped by 6,000 to 312,000. The Philadelphia Fed Index for June increased to 17.8 from 15.4 in May, paced by broad-based gains in its various components; and the Leading Indicators Index for May increased 0.5% on top of a 0.3% increase in the prior month.

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