US precious metals bounced on bargain hunting and currency-based buying early on Tuesday, though dealings stayed a bit thin after a dramatic one-day profit-taking correction from recent multiyear peaks.
After closing down 3.8 percent on Monday and slipping to a new one-week low overnight, gold popped up as the dollar eased after a report showed mild core US inflation in April.
"Some confidence came back into the gold market on a renewed weakness in the dollar, but activity is rather limited," said Frank Aburto, a broker at Rosenthal-Collins Group in New York.
Silver, meanwhile, climbed after it previously settled off 6.3 percent, and platinum and palladium gained after shedding 2.6 percent and 5.9 percent, respectively, on Monday.
By 10:30 am EDT, gold for June delivery was up $7 or 1 percent at $692 an ounce on the New York Mercantile Exchange's COMEX division, near the top of a $675.50-to-$693.80 session range.
Aburto said the market was cautious, although some bullish traders continued to rebuild long positions early Tuesday. "The move yesterday was big but not one that would check the market's rise," he added.
On Friday, COMEX gold shot to its highest since January 1980, at $732, thanks to the recent trend of buying as a hedge against global tensions, soaring crude oil and a weak dollar.
The price of nearby gold futures has risen 37 percent this year. Gold is up 250 percent over the last five years.
Fundamental factors are mostly positive, analysts said, but the prospect of more speculative selling was still intimidating to the market after Monday's steep drop. "We believe that this correction ... will be a temporary phenomenon, but we are not confident that it is over yet," said John Reade, analyst with UBS, in a report.
Reade recommended cautious trades until investors and speculators in Japan, where precious metals were stuck limit-down Tuesday, were able to finish unwinding some sales. Spot gold rose to $689.00/690.00 an ounce, from $682.60/683.60 at Monday's New York close.
COMEX July silver futures rose 3.5 cents to $13.37 an ounce, dealing from a fresh 2-1/2-week low at $12.82 to $13.48.
Spot silver climbed 10 cents to $13.39/13.49 an ounce. The London fix was at $13.22. NYMEX July platinum rose $15.20 to $1,300 an ounce. On Friday, it soared to its highest level ever, at $1,340.
Spot platinum was worth $1,295/1,305 an ounce.
NYMEX June palladium gained $2.25 to $377 an ounce, after reaching $409 on Friday, its highest in four years. Spot palladium rose to $375/381.
Comments
Comments are closed.