By The Associated Press
Prices for gold and other metals jumped Thursday, propelled by an encouraging report about China's trade growth.
Gold for February delivery rose $22.50, more than 1 percent, to $1,678 per ounce. March silver rose more than 2 percent, up 66.9 cents to $30.918 per ounce.
Alan Knuckman, chief market strategist at Optionshop in Chicago, said gold was turning around after the detrimental effect of the Federal Reserve minutes last week. Gold prices had slipped after the Fed disclosed that some of its board members disagree over how long the central bank should continue a bond-purchasing program.The bond-buying program is intended to invigorate the economy, by keeping the return on bond investing low and thus encouraging investors to move into stocks. Such a program can also encourage inflation, though, and many investors buy gold because they think it will be a hedge against inflation. So when there were hints that some Fed members wanted to curb the bond-buying program sooner rather than later, gold fell. Knuckman said Thursday that investors were realizing that they'd overreacted to the Fed disclosure. "They're not going to stop this cheap-money policy any time soon," Knuckman said, referring to the Fed's bond buying. "People read too much into those Fed minutes." Also boosting metals prices were hints that the global economy could be improving. China's exports and imports rose, a sign of higher demand both inside and outside the country. Mario Draghi, head of the European Central Bank, said the struggling euro area should start growing again later this year. That sent up prices for metals that are key to manufacturing. March copper rose 3.85 cents, or 1 percent, to $3.709 per pound. March palladium rose $14, or 2 percent, to $702.20 per ounce. April platinum rose $34.30, more than 2 percent, to $1,634.30 per ounce.