Gold futures were rising Wednesday as traders received another round of economic data and the guessing about the bank stress tests continued, increasing demand for the metal as a safe haven.
June futures were climbing $6.90 to $911.20 an ounce at the Comex division of the New York Mercantile Exchange. The contract has traded as low as $895.40 and as high as $913.50 so far during the session. Silver futures were rising 32 cents to $12.72 an ounce, and copper prices were adding 7 cents to $2.15 a pound.
Gold prices were climbing into a higher trading range as inflationary fears and market jitters increased investment demand. Reports indicated that
Bank of America
might need $34 billion in capital after the government's stress tests, and an unemployment number, although better-than-expected, was still dismal at 492,000 losses in the private sector in April.
In times of economic uncertainty, investors typically flee risky equities for the safety of gold. But deflationary concerns and an overall improving stock market are preventing the precious metal from rallying. Crude, base metals and copper are also rising, which point to signs of a better economy.
" If you believe in inflation you will look for higher prices, and those who believe in deflation believe in lower prices," says George Gero, vice president of global futures at RBC Capital Markets.
Gero believes gold will hit a new trading range with $880 on the low side and $920 on the high side. "Gold futures will attract more attention if
the price moves up ... above $925/930. You will
see momentum traders."
In gold stocks,
was up 3.3% to $42.36, while
was higher by 2.5% at $32.22.
was climbing more than 4% to $8.80. The company reported a better-than-expected 36% rise in first-quarter profit.
was rising 3.4% to $16.98 after the company posted a first-quarter profit of 10 cents a share, which was slightly lower than expected.
was climbing more than 4% to $48.16, and the
exchange traded fund was slightly higher at $89.54.
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.