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1st LD Writethru: Gold jumps as Switzerland scraps euro cap

Xinhua, January 16, 2015 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange jumped on Thursday to a more than-four-month high as investors weighed the Switzerland's unexpected move to abandon a three-year cap on the Swiss franc against the euro.

The most active gold contract for February delivery rose 30.3 U. S. dollars, or 2.45 percent, to settle at 1,264.80 dollars per ounce.

The Swiss National Bank on Thursday unexpectedly announced that it would lift a three-year-old cap on the Swiss franc, sending the franc soaring against the euro and pushing equities on a downturn.

The bank's move, analyst said, increased speculation that the European Central Bank will unveil a bond-buying program during a policy meeting on Jan. 22 in an effort to fight deflation.

Switzerland is one of the world's biggest buyers of the euro, and its move showed a lack of confidence in the euro and also indicated a high level of uncertainty in the euro zone, analysts said. This would puts pressure on equities, pushing investors toward buying safe haven assets such as gold and German bonds.

Meanwhile, the number of Americans who initially applied for jobless benefits in the week ending Jan. 10 increased 19,000 to 316,000 from the previous week's revised level, the U.S. Labor Department said Thursday. This gave gold additional support as the U.S. equities market reacted negatively to the news.

Silver for March delivery increased 11.4 cents, or 0.67 percent, to close at 17.102 dollars per ounce. Platinum for April delivery gained 23.8 dollars, or 1.92 percent, to close at 1,262.80 dollars per ounce. Endite