Gold prices firmed on Friday after the previous day's sharp losses, taking a lead from stronger oil prices and dollar weakness. At 1640 GMT, spot gold was trading at $788.40/789.10 against $785.80/786.60 late in New York on Thursday, when a bounce in the dollar and lower oil ignited heavy profit-taking that took the metal to its lowest in two weeks at $782.35.
Traders and analysts said resurgent oil and a weaker dollar after the biggest drop in US industrial production since January aided buying, but other players continued to take profit after the metal hit 28-year highs last week above $845.
"You've got these two countervailing currents in the market today. Those taking profit and those coming in on the back of the dollar and oil. The positive just about outweighed the negative," said analyst Ross Norman at Thebulliondesk.com.
Gold is now well below its high of $845.40 set last week and is still seen as being in correction mode, with traders closely watching as the dollar weakens on continuing worries over the US economy.
"I suppose a lot will depend on what happens to the US dollar going forward. Obviously, the US dollar is still at soft levels against the euro after all," said David Moore, a commodity strategist at the Commonwealth Bank of Australia. "It's still a very uncertain outlook. If the US dollar were to come under pressure again, and if oil prices were to turn around, then we might see gold prices move higher again." Seen as both a safe haven and a dollar hedge, gold often moves in the opposite direction to the greenback.
Oil rose above the $95 mark on Friday with traders consolidating their positions ahead of the expiry of the December contract, and like gold, clawing back losses from Thursday supported by tighter winter fuel conditions. Spot platinum rose to $1,446/1,451 an ounce from $1,428/1,432 in New York.
Dealers said the market got a lift as Anglo Platinum, the world's biggest platinum producer, said it had cut its output forecast for 2007 to between 2.45 and 2.5 million ounces of refined platinum from its previous forecast. Earlier this week, a correction in gold pulled platinum down to a one-month low of $1,385. Silver falling to $365.00/368.00 against a close of 370.00/373.00.
Comments
Comments are closed.