Gold logs a loss, but gains for the week

By Myra P. Saefong and Barbara Kollmeyer, MarketWatch

SAN FRANCISCO (MarketWatch) — Gold futures logged a modest loss on Friday in quiet trading ahead of the three-day U.S. holiday weekend but prices finished higher for the week, finding support from the recent declines in global stock markets and a weaker dollar.

In metals mining news, Barrick Gold Corp.’s ABX -1.99%  U.S-traded shares were halted midday Friday. Chile’s government said it issued a fine linked to the company’s Pascua-Lama project.

On the Comex division of the New York Mercantile Exchange, gold for August delivery GCQ3 -0.48%  fell $5.30, or 0.4%, to settle at $1,387.50 an ounce.

June gold GCM3 -0.46% , which is also among the most-active contracts, closed at $1,386.60, down $5.20 or 0.4%.

Both active contracts ended around 1.6% above the week-ago close of $1,364.70 for the June contract.

The gold community needs “a day or two to catch its breath, process the latest signals from the [U.S. Federal Reserve] and see where the U.S. dollar is heading next,” said Jeffrey Wright, managing director at Global Hunter Securities.

Gold futures on Thursday had settled at their highest level since May 15, according to FactSet data.

That burst higher “was remarkable because it was one of the very few, if not the only, asset to post strong gains in a very turbulent trading atmosphere,” said Brien Lundin, editor of Gold Newsletter. “It apparently gained favor as a safe haven in the storm surrounding all the other major markets, which is a function the metal hasn’t recently enjoyed.”

Trading on Comex will reopen Tuesday, following Monday’s U.S. Memorial Day holiday.

July silver SIN3 -0.84%  closed down 1 cent, or 0.05%, on Friday at $22.50 an ounce. Prices saw a 0.6% gain on the week.

Equities and the dollar

U.S. stocks were little changed Friday afternoon in the midst of more turbulence for Japanese stocks and as U.S. investors took to the sidelines ahead of Memorial Day weekend. Fresh data showed some lift among American manufacturers as durable-goods orders rose 3.3% in April against expectations for a rise of 1.4%.

June gold GCM3 -0.46% , which is also among the most-active contracts, closed at $1,386.60, down $5.20 or 0.4%.

Both active contracts ended around 1.6% above the week-ago close of $1,364.70 for the June contract.

The gold community needs “a day or two to catch its breath, process the latest signals from the [U.S. Federal Reserve] and see where the U.S. dollar is heading next,” said Jeffrey Wright, managing director at Global Hunter Securities.

Gold futures on Thursday had settled at their highest level since May 15, according to FactSet data.

That burst higher “was remarkable because it was one of the very few, if not the only, asset to post strong gains in a very turbulent trading atmosphere,” said Brien Lundin, editor of Gold Newsletter. “It apparently gained favor as a safe haven in the storm surrounding all the other major markets, which is a function the metal hasn’t recently enjoyed.”

Trading on Comex will reopen Tuesday, following Monday’s U.S. Memorial Day holiday.

July silver SIN3 -0.84%  closed down 1 cent, or 0.05%, on Friday at $22.50 an ounce. Prices saw a 0.6% gain on the week.

Equities and the dollar

U.S. stocks were little changed Friday afternoon in the midst of more turbulence for Japanese stocks and as U.S. investors took to the sidelines ahead of Memorial Day weekend. Fresh data showed some lift among American manufacturers as durable-goods orders rose 3.3% in April against expectations for a rise of 1.4%.

Trading in shares of Silver Wheaton Corp. SLW -1.52%  were also halted. The company has an interest in the mine.

Metals mining shares were broadly lower, with the Philadelphia Gold and Silver Index XAU -1.24%  down 1.1% in the afternoon, trading over 3% lower for the week.

In the currencies market, the dollar DXY -0.13% remained weaker Friday, though that didn’t appear to be a big help for gold. Commodities priced in dollars, including gold, tend to trade inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of metals to holders of other currencies.

“Going forward, gold’s future will be determined by the direction of the U.S. dollar and/or the prospects for the [U.S. Federal Reserve’s] quantitative easing program,” said Lundin.

On Wednesday, Fed Chairman Ben Bernanke offered mixed signals on Fed policy. In congressional testimony, he warned against premature tightening of the policy, but then when asked during a question-and-answer session when the central bank will slow down asset purchases, he said that could come “in the next few meetings.”

As for the dollar, Lundin said, it has started to catch up — on Thursday and Friday — with the overall race among currencies “down the value hill in a series of competitive devaluations.”

“In the end, this race to the bottom will have all fiat currencies fall against gold,” he said.

Among metals traded on Comex Friday, July copper HGN3 -0.33%  fell less than a cent, or 0.3%, to $3.295 a pound, down about 0.8% from a week ago.

Copper prices fell Thursday after preliminary data released from HSBC showed that China’s manufacturing activity swung to contraction in May.

“Weaker-than-expected Chinese manufacturing data do not bode well for future metals demand and the impact of this sentiment could keep [copper] prices in recent range in the short term,” analysts at Barclays wrote in a Friday note.

June palladium futures PAM3 -1.52%  fell $12.20, or 1.7%, to end at $726.45 an ounce, losing around 1.9% for the week, while July platinum PLN3 -0.19%  lost $5.30, or 0.4%, to $1,451.90 an ounce, for a 1.1% fall from last week’s close.

Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong. Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @MWBarbaraKollmeyer.

Advertisements

About abwehra group

The Art&Science of Trading Gold
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s