Gold rebounded on Friday as investors sought bargains after prices dropped to near a six-week low the previous day on a firmer US dollar, but the $900 resistance level remains a tough one to crack. Gold rose to $871.45/872.45 an ounce from $867.55/869.55 late in New York on Thursday, when it fell to as low as $856.80, its lowest since May 2.
Gold has lost more than 4 percent in value this week since hitting a near two-week high of $908.70 on Monday. It is well below a record high of $1,030.80 hit in mid-March. Bullion was likely to track movements in the currency and energy markets, where record crude prices have boosted its appeal as a hedge against inflation. Silver was also off a six-week low, while platinum and palladium firmed.
Spot platinum rose to $2,022.50/2,042.50 an ounce from $2,010.50/2,030.50 late in New York. Silver edged up to $16.55/16.61 an ounce from $16.44/16.54. Spot palladium rose to $435.00/443.00 an ounce from $433.50/441.50.
US GOLD DOWN
NEW YORK: US gold futures closed on Thursday with moderate losses, repairing some of the damage from falling to a six-week low when crude oil futures lost ground, but as crude turned around, gold buyers jumped in to pull it up off the lows, traders said. The dollar's rally against the euro also contributed to gold's early decline as the interest rate outlooks seem to favor the US after last month's surprisingly strong US retail sales data, they added.
GOLD: The August gold contract on COMEX division of New York Mercantile Exchange finished $10.90 lower at $872.0 an ounce, and set a range between $860 and $873 an ounce. Benchmark August gold earlier tumbled to a low dating back to March 2 at $859.6. Traders said gold, and precious metals that mirror gold's path, are following the direction of crude oil prices and key off the dollar's direction.
Declines in oil tend to cause investors to unwind gold purchases as an inflation hedge. Conversely, a rise in the dollar diminishes the value of dollar-denominated gold for overseas investors.
"Gold follows crude and the euro pretty closely. Crude had a monstrous reversal today, very big range. So crude going down and the euro falling against the dollar definitely weighed on gold also," said one New York gold trader. US crude oil futures settled with small gains at $136.74 a barrel, after dropping as low as $131.55 earlier on the dollar gains.
News that Nigeria's senior oil workers' union renewed a strike threat against Chevron raised supply worries. COMEX estimated final gold volume at a hefty 148,536 lots. Spot gold was lower at $867.55/869.55 an ounce than $881.15/882.55 an ounce in late Wednesday business.
The London afternoon gold fix set at $862.25 an ounce.
PLATINUM: July dropped $11.20 to close at $2,025.90 an ounce, falling with other precious metals. Spot platinum quoted late at $2,010.50/2,030.50 an ounce.
PALLADIUM: September palladium rose $8.65 to finish at $441.65 an ounce. Spot palladium was quoted at $433.50/441.50 an ounce.
SILVER: July silver futures slid 37.0 cent to end at $16.4850 an ounce. Silver followed gold lower. Range spanned $16.25 to $16.9250 per ounce. Spot silver was down at $16.44/16.54 an ounce from $16.88/16.95 per ounce in late Wednesday business.
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