US gold futures eased early Thursday in quiet trade, ignoring higher oil and a weaker dollar, while technical-momentum buying lifted palladium contracts higher.
At 10:33 am EDT (1433 GMT), most-active gold futures for June delivery on the COMEX division of the New York Mercantile Exchange were down 70 cents at $681.00 an ounce, trading between $680.00 and $684.60.
Paul McLeod, vice president of precious metals at Commerzbank, said that bullion was currently trading in a very wide range and he was positive on gold's short-term outlook. "Earlier this week it was trading on its own momentum as supposed to taking directions from elsewhere. I think that's going to continue to play out over the course of the next week of two," he said.
"So that's really the investment allure of gold that is going to lead to further price appreciation," McLeod said. The June contract has now gained nearly 6 percent in the past four weeks, but it is still far below its 2007 high of $699.00 an ounce which was set in late February just before the sell-off of global stock markets.
On Wednesday, the Federal Reserve said in its post-meeting minutes that further interest rate increases might be needed to combat inflation. It also cited higher uncertainties about the outlook for both growth and inflation.
"Yesterday, the Fed hinted at possible slowing. So I think that put a little pressure on the dollar," said James Quinn, commodity commentator at A.G. Edwards, adding the gold market was very quiet early Wednesday. The dollar dropped to a new low against the euro after the European Central Bank kept interest rates at 3.75 percent but signalled that it was likely to raise rates as soon as June to curb the risk of higher inflation.
The yen also rebounded from a record low versus the euro after ECB chief Jean-Claude Trichet said that currency rates should reflect a recovery in Japan's economy. On the other hand, palladium futures opened sharply higher for third straight session. June palladium was up $2.70 at $372.25 an ounce, after hitting a high of $377.90, which marked its loftiest level since May 2006. Spot palladium fetched $367.00/72.00.
McLeod said that palladium was boosted by buying after a technical breakout on the charts, though profit-taking might be kicking in. "It took a long time to get above $350 (spot). I think we are solidly above that. We are certainly here expecting it to be well-supported and move up through the next level, which is $377," McLeod said.
Palladium futures have now rallied about 6 percent from their Monday low of $355 an ounce. Spot gold was quoted at $675.90/6.40 an ounce, compared with the $675.50/6.50 quoted late Wednesday. The London afternoon gold fix was set at $677.25. COMEX May silver was down 2.50 cents at $13.865 an ounce, trading from $13.840 to $13.975.
Spot silver was quoted at $13.83/3.86, compared with $13.79/3.84 late Wednesday. Silver was fixed at $13.840 in London. NYMEX July platinum was $4.30 lower at $1,277.00 an ounce. Spot platinum was quoted at $1,267.00/72.00.
Comments
Comments are closed.