Updated from 12:22 p.m. ET with settlement prices
NEW YORK (
Gold prices jumped on Thursday after the European Central Bank reduced interest rates and the
Federal Reserve reiterated its commitment to monetary stimulus.
COMEX Gold for June delivery rose $21.40 to $1,467.60 an ounce. The
gold price traded as high as $1,473.30 and as low as $1,448.10 an ounce, while the spot price was adding $9.80, according to Kitco's gold index.
ECB cut its benchmark rate by 25 basis points to 0.5% -- a record low -- from 0.75%, which was the baseline rate since July 2012.
Fed on Wednesday said in its latest policy-making statement
that the central bank is prepared to increase or reduce monetary stimulus as needed. The statement marked a shift among central bankers away from the decision to begin scaling back on its current purchasing programs.
"All this money flowing into the world economy augers for inflationary worries, it also is an underlying bullish factor for the raw commodities sector, including the precious metals," Jim Wyckoff, senior metals analyst at Kitco.com, said in an interview.
for July delivery increased 49 cents to $23.83 an ounce, while the
U.S. dollar index
was popping 0.72% to $82.23 as the euro weakened against the greenback following the ECB announcement.
"If the economy were moving ahead vigorously, if jobs were increasing, the unemployment rate were falling and production were increasing, then the conversation at the
Federal Open Market Committee
meeting would have been about how soon to we start backing off from quantitative easing and maybe even thinking about how quickly the federal funds rate would be moving up," Benjamin Friedman, economist at Harvard University,
Gold has continued to search for a firm trading range after its more than 13% selloff across two consecutive trading sessions in mid-April.
The yellow metal has retraced about half of those losses largely supported by retail demand.
"Despite the continuing drop in the amount of gold held in physically backed ETPs, retail demand has helped gold prices rise this week by around 1.8% to $1,457 an ounce," Natixis wrote in a research note on Thursday.
Gold mining stocks were mixed on Thursday. Shares of
were losing 2.6%, while shares of
(AUY - Get Report)
were gaining 3.1%.
Among volume leaders,
(ABX - Get Report)
was climbing 2%.
SPDR Gold Trust
was ticking higher by 0.62% to $141.98, while
iShares Gold Trust
was increasing 0.61% to $14.27.
-- Written by Joe Deaux in New York.