Reuters: Gold edged higher on Tuesday to the highest level in more than five months as lacklustre manufacturing data from around the globe fanned speculation of imminent easing measures from central banks. After US Federal Reserve Chairman Ben Bernanke kept the door open for more stimulus measures last week, data on Monday showed a contraction in manufacturing activity globally and put more pressure on policymakers to take action.
Gold and silver rode the sentiment to multi-month highs as investors piled into the precious metals, aiming to hedge against potential inflation risks. The most-active US silver futures contract jumped nearly 3 per cent earlier in the day to a 4-1/2 month high of $32.38 per ounce, before easing slightly to $32.27.
Silver, both a precious and an industrial metal, has risen nearly 10 per cent over the past two weeks, outstripping a 4 per cent gain in gold, despite recent data suggesting gloomy global growth outlook.
“Silver looks more at the stimulus implications of weak data,” said Nick Trevethan, senior commodity strategist at ANZ in Singapore, adding that the strength in base metals had also helped underpin silver.
Silver is also notorious for price volatility, given the relatively small size of the market and limited liquidity.
Spot gold rose to $1,696.91 per ounce, the highest since mid-March, then eased slightly to $1,695.46.
US gold gained 0.6 per cent to $1,698.20. Asia’s physical market saw some scrap selling as prices approached the key $1,700 level.