Gold and silver futures maintained their modest gains on Thursday afternoon despite further strength in the U.S. dollar. The greenback rallied against the euro currency after the European Central Bank (ECB) downgraded its 2013 GDP forecast to negative 0.9% from positive 0.3%.
COMEX gold for February delivery settled up by $8.00, or 0.5%, at $1,701.80 per ounce after reaching an intra-day high of $1,704.80. Silver futures for March delivery at the COMEX closed with a gain of $0.16, or 0.5%, at $33.11 per ounce.
Gold and silver initially rallied alongside precious metals, but gave back the majority of their gains in afternoon trading. The Philadelphia Gold & Silver Index (XAU) climbed by as much as 1.5% to 162.71, but finished up by just 0.1% at 160.62.
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While the XAU only advanced slightly, several of its component companies fared substantially better. Shares of Eldorado Gold (EGO) rose by 1.7% to $13.58, Kinross Gold by 1.3% to $9.63, and Royal Gold (RGLD) by 1.8% to $81.14.
Commenting on today’s strength in gold, Jeffrey Wright – a managing director at Global Hunter Securities – stated that “It is based on bargain hunting along with European Central Bank cutting its economic growth forecast. So, a little safe-haven action, coupled with the end of short-term profit taking.”