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Metals climbed on Thursday after US Federal Reserve Chairman Ben Bernanke backed sustaining of the economic stimulus, rejecting the market speculation on its early withdrawal. While gold climbed to the highest in two weeks, platinum and silver touched their two-week and four-month highs, respectively. Copper jumped to the highest level in three months, while aluminium and other base metals followed. Gold and silver in Mumbai's popular Zaveri Bazaar surged 1.64 per cent and 2.07 per cent to close the day at Rs 26,640 per 10g and Rs 41,860 a kg, respectively, with the rupee remaining range-bound.
Copper for immediate delivery on the London Metal Exchange hit $7,000 a tonne before closing the morning session at $6,995, a rise of 3.18 per cent from the previous day. Aluminium, zinc and lead also gained two per cent each per tonne to settle at $1,800.5, $1,885.5 and $2,093, respectively.
Gold for immediate delivery in London rose 2.25 per cent to $1,297 an ounce (oz), before recovering to $1,288.10 an oz in the late afternoon trade. Silver for immediate delivery rose 3.92 per cent to $20.15 an oz. Platinum followed and traded with a gain of two per cent at $1,400 an oz, after climbing to $1,412, the highest level since June 20. Bullion fell sharply as Bernanke said after the Fed's June meeting that the central bank might reduce its $85 billion of monthly asset purchases this year.
"This is not a reversal in trend but a temporary phenomenon," said Gnanasekar Thiagarajan, director, Commtrendz Research.
Asnwering questions after a speech in Cambridge, Massachusetts, on Wednesday, Bernanke said: "It may well be some time after we hit 6.5 per cent before rates reach any significant level. So again, the overall message is accommodation. There is some prospective, gradual and possible change in the mix of instruments, but that shouldn't be confused with the overall thrust of policy, which is highly accommodative."
The Fed chief added the Federal Open Market Committee might opt to hold interest rates near zero even after unemployment reached 6.5 per cent due to the possibility of low inflation.
Markets interpreted Bernanke's message as an indication of a continuation in the economic stimulus against the earlier perception of its early withdrawal. In metals, there might be a technical retracement to see little more upsurge all across, Commtrendz Research's Thiagarajan said.
Added Naveen Mathur, associate director (commodities and currencies), Angel Broking: "The dollar's weakness pushed metals temporarily up. But the trend is not sustainable in the long term."
The majorly tracked c euro surged against the dollar to trade at 1.30 in the early afternoon but weakened marginally towards the evening in London. The Indian currency, however, remained resilient, to close on Thursday at 59.68 against 59.66 the previous day.
Prerana Desai, vice-president, Kotak Commodity Services, however, feels the metals market would soon catch the downward move after the initial short term blip of Barnanke's statement.
Experts believe gold and silver to trade at $1,310-1,350 and $21-22 an oz, respectively, for the short term. Base metals will also take some upsurge before settling to the normal range.
On the Multi Commodity Exchange, however, copper for delivery in August gained 2.97 per cent to Rs 424.20 a kg in early evening trade. Other metals also followed the global trend.
