Investing.com - Gold futures shot up on Thursday on demand from investors seeking safe-harbor from fears southern Europe's banking sector may be in trouble, while sentiments that the Federal Reserve will keep rates unchanged long after it concludes stimulus programs also supported the yellow metal.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,337.80 a troy ounce during U.S. trading, up 1.02%, up from a session low of $1,325.40 and off a high of $1,346.10.
The August contract settled up 0.59% at $1,324.30 on Wednesday.
Futures were likely to find support at $1,312.10 a troy ounce, Monday's low, and resistance at $1,391.40, the high from March 17.
The parent company of Portugal's largest bank, Banco Espírito Santo, said it missed payments on commercial paper to a few clients, which spooked markets by fueling concerns surrounding the soundness of the banking sectors in Portugal as well as in Spain and Italy.
Gold rose on safe-haven demand while, weak euro zone factory data further bolstered the precious metal's appeal.
Italy's industrial output unexpectedly fell 1.2% in May from April, defying expectations for a 0.2% expansion, while French industrial production plunged 1.7% in May, also confounding expectations for a 0.2% gain.
Meanwhile in the U.S., solid jobless claims numbers supported the greenback, which tends to trade inversely with the yellow metal, the European concerns offset the data due to Fed expectations
The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending July 5 declined by 11,000 to 304,000. Analysts had expected jobless claims to hold steady at 315,000 last week.
On Wednesday, the Federal Reserve released the minutes of its June policy meeting in which monetary authorities forecast bond purchases should conclude in October.
Bond purchases tend to support gold by weakening the dollar, though gold rose anyway on sentiments that the Federal Reserve will likely keep interest rates low for some time after the bond-buying program closes.
Meanwhile, silver for September delivery was up 1.80% at $21.447 a troy ounce, while copper futures for September delivery were up 0.75% at $3.272 a pound.