Gold, silver rise on European uncertainty

AP News
Posted: Nov 03, 2011 4:05 PM
Gold, silver rise on European uncertainty

Precious metal prices closed higher Thursday as questions continued to swirl about Europe's efforts to resolve its debt crisis.

Gold for December delivery gained $35.50, or 2 percent, to settle at $1,765.10 per ounce. December silver rose 55.5 cents, or 1.6 percent, to close at $34.498 an ounce.

Precious metals often rise during times of financial uncertainty. Investors buy hard assets as a way to protect their money. On Thursday, traders were looking for safety as they tried to determine how the European financial crisis would unfold.

Greece's prime minister George Papandreou said he would abandon his plan to put a European bailout package to a popular vote. A "no" vote would have endangered Europe's plan to shore up its financial system and protect European banks from a default by Greece.

"Traders tried, in desperation, to make sense out of the steady flow of headlines ... but a solution to the current crisis still seems miles away," George Gero, senior vice president at RBC Wealth Management in New York wrote in a note to clients Thursday.

Precious metals also gained from the news that the European Central Bank cut its benchmark interest rate to 1.25 percent from 1.5 percent. The bank's stimulus action could boost inflation Europe, which tends to boost the value of gold and silver.

Industrial metals also rose.

Copper for December delivery rose 0.75 cents to settle at $3.5885 a pound. December palladium gained $13.45, or 2 percent, at $662.10 an ounce. January platinum rose $45.70 to finish at $1,647 an ounce.

Crop prices were also up. December wheat gained 12.5 cents to finish at $6.36 per bushel. December corn fell 8.5 cents to end at $6.535 per bushel. November soybeans gained 24.5 cents to finish at $12.2725 a bushel.

Benchmark oil gained $1.56, or nearly 2 percent, to end at $94.07 per barrel on the New York Mercantile Exchange.

Heating oil fell 3.74 cents to finish at $3.0381 per gallon, gasoline futures rose 1.46 cents to close at $2.6418 per gallon and natural gas gained 1.9 cents to close at $3.901 per 1,000 cubic feet.