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BookmarkMADRID (MarketWatch) — Gold prices shot higher on Thursday, aiming for a second straight day of gains, as the dollar tumbled below a key level against the Japanese yen, coinciding with another big drop for stocks in Japan.
Gold for August delivery GCQ3 +1.42% rose $15.10, or 1.1%, to $1,406.90 an ounce in electronic transactions. Prices on Wednesday settled higher by $12.10, or 0.9%, on the Comex division of the New York Mercantile Exchange.
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Gold went from around a $5 gain to $15 an ounce after another volatile day forJapanese equities.The Nikkei Stock Average JP:NIK -5.15% , which had been dropping throughout most of Thursday’s session, closed down 5.2%, with the biggest losses coming in the last hour or so of trade.
In turn, the dollar fell below ¥101 as investors backed out of equities and moved into the Japanese currency. Dollar weakness tends to lift prices for dollar-denominated commodities, as it makes them less expensive for holders of other currencies to buy.
“Gold continues to form a bullish ascending triangle base below $1,400, with key support currently in place near $1,380,” said CMC Markets senior market analyst Colin Cieszynski to clients Wednesday.
Wednesday’s move higher for gold was aided by strength in the euro EURUSD +0.64% against the U.S. dollar, and the euro on Thursday extended gains against the greenback. The shared currency traded at $1.2953 compared with $1.2930 seen in North American trading a day prior.
The gold market has had some support from physical buying in Asia, analysts have said. Asian gold demand from this April to June is expected to reach a quarterly record, the World Gold Council said Wednesday, according to media reports.
But outflows from gold exchange-traded funds and cuts in forecast for gold prices have also weighed on the precious metal, which is on pace to fall 5.5% in May. Earlier this month, it had been on track for a decline of more than 7%.
