Gold and silver prices closed modestly higher on the futures markets Wednesday as strong demand from foreign buyers offset expectations that the Federal Reserve will signal fresh, potentially inflationary, intervention in the market next month.
Precious metals, which are generally seen as safe-haven investments like Treasuries, typically move in the opposite direction of stocks. But Wednesday both stocks and precious metals rose. Dealers attributed gold's rise to strong demand outside the U.S.
The metals market is global. We're still shipping a lot of product to Europe still seeing a tremendous demand coming out of Germany, said Peter Thomas, business development director for PFG Best.
Expectations about further stimulus from the Federal Reserve, stemming from this week's release of a key Fed meeting earlier this month, eased investors' concerns and helped lift the Dow Jones industrial average into positive territory for the year.
Stocks also bounced back after a report early Wednesday by business outsourcing firm Automatic Data Processing, which showed private-sector added 91,000 jobs in August. Although this number was slightly less than a Bloomberg survey having employers add 110,000 jobs in August, the current number shows that hiring may have taken only a small hit due to debt fears.
In afternoon trading, the Dow reached 11,605.13, with 24 of the 30 stocks posting gains for the day. Through Tuesday, the Dow -- which is now positive for the year -- has gained 410 points in the last three sessions, helping to further overcome some of the losses experienced in August.
Gold for December delivery on the CME Comex division of the New York Mercantile Exchange settled at $1,31.70, a gain of $1.90, and silver ended the session at $41.77, a gain of 30 cents.