US gold futures ended $2 higher on Friday after the previous session's sharp losses, helped by buying following options expirations, a weaker dollar and recovering copper prices. Most-active gold for June delivery on the Comex division of the New York Mercantile Exchange settled up $2.00 at $655.30 an ounce, trading between $653.30 and $656.90.
George Nickers at FC Stone said that gold bounced because of the relief of selling pressure after June gold options expired on Thursday. He said that gold futures could retrace losses in the short run. "It should be going back up because the option writers were able to contain the underlying strength of the gold market on Thursday. Now, the overhead assistance should be very minimal," Nickas said.
Option expirations added volatility to the market because of the interaction of different trading strategies by investors. On Thursday, the June contract slumped to a 10-week low and finished down nearly $10 an ounce in heavy trade, as a rising dollar prompted funds and central banks to sell.
Larger-than-usual gold sales by central banks, especially by the European Central Bank, have recently weighed on gold prices. Comex estimated final gold volume at 98,756 lots and options turnover at 3,864 lots.
Turnover in the Chicago Board of Trade's electronically traded 100-oz gold contract was 21,943 lots as of 2:21 pm. Bart Melek, global commodity strategist at BMO Capital Markets, said in a note that the fundamentals of bullion remained strong and the long-haul bull market was not over "by a long shot." Melek said that, however, a higher dollar could hurt gold in the short term. Spot gold was quoted at $655.35/5.85, versus $653.20/3.70 late on Thursday.
The London afternoon gold fix was set at $655.30. Comex July silver finished up 8.00 cents at $13.000 an ounce, traded from $12.895 to $13.035. Spot silver was quoted at $12.92/2.96, up from $12.82/2.85 on Thursday in New York. In London, silver was fixed at $12.925. The platinum group metals, Europe-based ETF Securities said that it had no plans to list its new platinum fund, the world's first, in the United States market and said another firm had dropped the idea of launching a similar product in the United States.
July platinum ended down $12.90, or 1.0 percent, at $1,277.80 an ounce. Spot platinum was quoted at $1,266.00/1,270.00. June palladium dropped $1.30 to close at $367.80 an ounce. Spot palladium fetched $363.00/367.00.