New York gold settles up as dollar slips before election

31 Oct, 2004

Comex gold futures closed higher on Friday as a soft dollar and pricey oil lured investors to the hard asset before the tight US presidential vote next week, dealers said.
December gold at the New York Mercantile Exchange's Comex division finished up $3.30 at $429.40 an ounce, within a range of $425 to $429.80. Final estimated volume totalled 54,000 contracts.
Gold prices got a boost primarily as the dollar drifted lower into the weekend amid election uncertainty and as markets sifted through the latest mixed bag of US economic data.
"As we enter the last few days before the US presidential election and with no clear leader at the moment, market volatility seems to be increasing rapidly, with the outcome likely to have quite an impact on near-term price direction," James Moore of thebulliondesk.com said.
Spot gold changed hands at $428.15/8.90, above on Thursday's New York close at $424.20/4.70. On Friday's afternoon fix in London was at $425.55. The euro rose to $1.2790 in late trading, from around $1.2726 late on Thursday, though it was holding down from the eight-month high set on Tuesday at $1.2840.
A lower dollar tends to lift dollar-denominated gold, as the metal becomes cheaper for traders holding foreign currencies. "It's all a knee-jerk reaction to the euro," said a broker with a futures commission merchant.
Meanwhile, strong oil prices often support gold in its role among investors as a favoured hedge against inflation. US crude rose 83 cents to $51.75 a barrel in late trade. On the US data front, consumers fed a pick-up in economic growth in the third quarter but a sentiment survey for this month showed oil prices were dampening their spirits.
Though the third quarter's annualised 3.7 percent gain in gross domestic product was below forecasts for a 4.2 percent pace, it topped the 3.3 percent clip of the prior quarter. A separate report showed signs of renewal in manufacturing.
The Chicago Purchasing Managers Index, who measures a series of variables from production to new orders in hiring, rose to 68.5 from 61.9 in September. Resistance in Comex gold was pegged at $430-432 an ounce and then at $436.50, with support at $423 and $422-420.
December silver shot up 11.3 cents to $7.305 an ounce, trading from $7.12 to $7.33. Spot silver touched $7.26/29, above its last close at $7.14/17. The London fix was at $7.16. January platinum rose $1.40 to $833 an ounce.
Spot platinum reached $832.00/837.00. Illiquid December palladium dipped to $2.55 to $212.20 an ounce. Spot palladium was at $210.50/216.50.

Read Comments