Investing.com - Gold prices soared on Thursday as investors took up long positions betting that the Federal Reserve will keep stimulus policies in place to make sure a recent fiscal showdown that closed the government and nearly exposed the country to default won't hamper recovery.
Monetary stimulus tools often weaken the dollar to drive recovery, making gold an attractive hedge.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,321.70 during U.S. afternoon hours, up 3.07%.
Gold prices hit a session low of USD1,273.80 a troy ounce and high of USD1,324.10 a troy ounce.
Gold futures were likely to find support at USD1,251.10 a troy ounce, Tuesday's low, and resistance at USD1,330.10, the high from Oct. 8.
The December contract settled up 0.71% at USD1,282.30 a troy ounce on Wednesday.
The U.S. Congress passed a bill to reopen the government and raise the debt ceiling Wednesday evening, just hours ahead of a deadline that would have opened the doors to possible sovereign debt defaults.
The deal will fund the government until Jan. 15 and raise the government borrowing limit until Feb. 7.
Both Republicans and Democrats also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by Dec. 13.
Still, the dollar weakened on the news amid concerns that the 16-day shutdown and accompanying default fears took their toll on an already fragile economic recovery, which could prompt the Federal Reserve to delay plans for rolling back its stimulus program until early 2014.
The Fed is currently buying USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery, weakening the dollar and making gold an attractive hedge in the process.
On Wednesday, the Federal Reserve released its Beige Book, which analyzes current economic conditions, and the document revealed that the U.S. central bank was concerned about the effects fiscal drags may have on recovery.
"Contacts across Districts generally remained cautiously optimistic in their outlook for future economic activity, although many also noted an increase in uncertainty due largely to the federal government shutdown and debt ceiling debate," the Beige Book read.
Elsewhere, the U.S. Department of Labor said Thursday the number of individuals filing for initial jobless benefits last week declined by 15,000 to a seasonally adjusted 358,000 from a downwardly revised 373,000 in the preceding week.
Analysts had expected U.S. jobless claims to decline to 335,000 last week.
A separate report showed that the Philly Fed manufacturing index ticked down to 19.8 from 22.3 in September, but came in above expectations for a reading of 15.0.
Elsewhere on the Comex, silver for December delivery was up 2.71% at USD21.943 a troy ounce, while copper for December delivery was down 0.43% and trading at USD3.294 a pound.
Monetary stimulus tools often weaken the dollar to drive recovery, making gold an attractive hedge.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,321.70 during U.S. afternoon hours, up 3.07%.
Gold prices hit a session low of USD1,273.80 a troy ounce and high of USD1,324.10 a troy ounce.
Gold futures were likely to find support at USD1,251.10 a troy ounce, Tuesday's low, and resistance at USD1,330.10, the high from Oct. 8.
The December contract settled up 0.71% at USD1,282.30 a troy ounce on Wednesday.
The U.S. Congress passed a bill to reopen the government and raise the debt ceiling Wednesday evening, just hours ahead of a deadline that would have opened the doors to possible sovereign debt defaults.
The deal will fund the government until Jan. 15 and raise the government borrowing limit until Feb. 7.
Both Republicans and Democrats also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by Dec. 13.
Still, the dollar weakened on the news amid concerns that the 16-day shutdown and accompanying default fears took their toll on an already fragile economic recovery, which could prompt the Federal Reserve to delay plans for rolling back its stimulus program until early 2014.
The Fed is currently buying USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery, weakening the dollar and making gold an attractive hedge in the process.
On Wednesday, the Federal Reserve released its Beige Book, which analyzes current economic conditions, and the document revealed that the U.S. central bank was concerned about the effects fiscal drags may have on recovery.
"Contacts across Districts generally remained cautiously optimistic in their outlook for future economic activity, although many also noted an increase in uncertainty due largely to the federal government shutdown and debt ceiling debate," the Beige Book read.
Elsewhere, the U.S. Department of Labor said Thursday the number of individuals filing for initial jobless benefits last week declined by 15,000 to a seasonally adjusted 358,000 from a downwardly revised 373,000 in the preceding week.
Analysts had expected U.S. jobless claims to decline to 335,000 last week.
A separate report showed that the Philly Fed manufacturing index ticked down to 19.8 from 22.3 in September, but came in above expectations for a reading of 15.0.
Elsewhere on the Comex, silver for December delivery was up 2.71% at USD21.943 a troy ounce, while copper for December delivery was down 0.43% and trading at USD3.294 a pound.