US gold futures settled lower on Friday, giving up the strong gains that held for much of the session as profit takers bailed out late, wary of carrying yellow metal positions over the weekend, traders said.
With gold sentiment split and getting pulled by disparate factors, traders said some players who may like gold over the longer term, fear getting hit in the near term. "It was profit taking, but part of if it is because of the perceived weakness in gold right now.
There's a lot of split on sentiment. So, I think a lot of people don't want to go home long over a weekend," a dealer said. August delivo $622 per ounce. It recovered from steep losses on Thursday to trade with strong gains throughout most of Friday's session, only to fall from its highs as the day was wrapping up.
Gold prices shot to a 26-year peak above $730 in mid-May followed by a steep correction that led to its lowest levels since April 17 in overnight business on Friday. "Coming off at the end of the day, it's people squaring up, afraid to hold the position over the weekend.
People who may hold a position overnight on Thursday, aren't going to hold it on Friday," said one trader. If current levels hold, he said, those same players might come back in and buy gold on Monday. Numerous factors lifted gold for most of the day, including higher oil prices, a slack dollar, and a report that showed US import prices were more than double forecasts in May.
"(Higher) oil helped gold. Gold is still an international commodity. We believe the dollar is weak relatively and world economies are weak and so we are going to see a lot of investing going into the world gold market," a New York bullion dealer said.
He said his gold desk looks for support to hold at $600 an ounce, followed by a return to higher prices.
"Gold is where people will go for a safe-haven play. There is a lot of depth to the gold market right now," he said.
Gold and other precious metals resumed their upturned on Friday after a brief slip following a government report that lifted the dollar when it showed the US trademarked by the higher import prices.
Higher oil prices had already inspired buying overnight. Oil rose above $71 a barrel on Friday as violence continued in Iraq, dashing hopes that the death of a top al Qaeda leader would turn the tide for the country's struggling oil industry.
Spot gold gave up gains and slipped to $605.45/6.45 an ounce late on Friday, down up from $609.50/610.20 on Thursday in New York. On Friday's late London fix was $616. Other precious metals held their rallies into the close.
Comex July silver at $11.21 was 13.50 cents higher by the close. Spot silver held onto gains at $11.14/1.24 an ounce by late on Friday, up from $11.09/11.19 on Thursday. Silver was fixed at $11.41 in London.
At Nymex, July platinum finished up 10 cents at $1,190.20 an ounce. Spot ended at $1,188/1,193.
September palladium increased $3.00 to end at $325.55 an ounce, after falling overnight to $310 a near three-month low. Spot palladium rose to $317/322.