Gold and silver prices moved higher late Thursday after posting big losses in the New York futures market earlier in the day.
Bargain hunters, who moved in after the regular trading session of the CME Comex division of the New York Mercantile Exchange closed, eyed the day's 2.5 percent drop in price of gold and silver as they bought up contracts for the precious metals.
Gold rose $9.60 to $1,791 and silver gained 41 cents to $39.92. Earlier in the day silver had fallen to its lowest level since Aug. 25.
Precious metals declined during the regular session as five big central banks announced a plan to inject U.S. dollars into European banks desperate for cash as a result of the continent's now-chronic sovereign debt crisis.
Over the past 20 months, interest rates on bonds of debt-burdened European countries like Greece, Portugal, Ireland, Spain and Italy have risen sharply and U.S. money market funds that typically loan to European banks have watched this growing sovereign debt crisis and have become increasingly reluctant to loan money to European banks that buy the bonds of those debt-burdened countries.
That has created a cycle of higher and higher interest rates, a falling euro, U.S. money market funds withdrawing even more from lending to European banks and, inevitably, European banks becoming desperate for cash.
Faced with the possibility that European banks might experience a Lehman Brothers-style freeze, the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank said Thursday they would team up with the European Central Bank to loan U.S. dollars to cash-starved European banks in exchange for euros.