Investing.com - Gold prices rallied 1% on Thursday, as investors digested a package of fresh stimulus measures by the European Central Bank.
On the Comex division of the New York Mercantile Exchange, gold for August delivery rose 0.89%, or $11.10 to trade at $1,255.40 a troy ounce during U.S. morning hours.
Prices rallied by as much as 1.06% earlier to hit a session high of $1,257.70. Gold declined 0.02%, or 20 cents, on Wednesday to settle at $1,244.30. Prices hit an 18-week low of $1,240.20 on June 3.
Prices were likely to find support at $1,237.50 an ounce, the low from January 30 and resistance at $1,260.30, the high from May 30.
The European Central Bank cut its benchmark interest rate to a record-low 0.15% from the 0.25% rate held since November earlier in the day.
The central bank also cut its marginal lending rate to 0.40% from 0.75% and lowered its deposit facility rate to -0.10% from 0.0%, thereby charging commercial banks for deposits parked overnight with the central bank.
Speaking at the ECB’s post-policy meeting press conference, Draghi outlined a number of other liquidity-boosting measures, including a targeted long term loan program and said it was preparing for asset-backed security purchases.
The comments saw the euro tumble to a four-month low of 1.3501 against the U.S. dollar.
Gold found additional support after data showed that the number of people who filed for unemployment assistance in the U.S. last week rose more than expected.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 31 increased by 8,000 to a seasonally adjusted 312,000 from the previous week’s revised total of 304,000.
Analysts had expected jobless claims to rise by 6,000 to 310,000 last week.
Also on the Comex, silver for July delivery jumped 1.07%, or 20.1 cents, to trade at $18.99 a troy ounce.
Elsewhere in metals trading, copper for July delivery fell 0.3%, or 0.9 cents, to trade at $3.084 a pound amid growing concerns over the demand outlook in China.
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