Gold prices slipped on Friday as the dollar recovered some losses against the euro, but firm demand from investors in physical bullion supported the market. Gold edged down to $828.00/829.00 an ounce in European trade by 1006 GMT from $832.40/833.40 an ounce late in New York. New York gold futures for December delivery slipped $3.70 an ounce to $835.30.
"Right now, I would distinguish between longer-term investors and smaller investors who believe jewellery demand is going to pick up in the next few months, and speculative holders who are getting out of the market," said Commerzbank analyst Eugen Weinberg. The dollar recovered against a basket of currencies on Friday, dampening earlier gains in the precious metal. Gold is often bought as an alternative investment to the dollar, and tends move in the opposite direction to it.
Traders paused in their profit taking on the US currency ahead of a speech from Federal Reserve chairman Ben Bernanke later in the session. However, analysts were positive for the outlook for gold. "A longer period of consolidation in the $800-$840 (range) would help gold establish a much stronger base, offering the physical base more time to adjust to higher prices," said TheBullionDesk.com analyst James Moore.
The Reuters/Jeffries CRB global commodities index is on track for its biggest weekly gain since 1975. Although it is currently on the back foot, gold is up around $60 an ounce from the nine-month low of $773 it reached last Friday, as investors in coins and bars piled back into the market. The US mint said in a statement on Thursday that it was temporarily suspending sales of its American Eagle bullion coins due a shortage as demand soared.
European traders also reported that producers were struggling to keep up with demand for some finished products. Among other precious metals, silver slid to $13.59/13.65 an ounce from $13.80/13.87 an ounce. Spot platinum eased to $1,440.00/1,460.00 an ounce from $1,449.50/1,469.50 an ounce late in New York, having hit a 1-week high of $1,472.50 an ounce earlier on Friday. Its sister metal palladium inched up to $287.50/295.50 an ounce from $286.00/294.00 an ounce.