MW: Gold rises on cautiousness over earnings, economy
Gold futures rose Monday, bouncing back from big losses in the previous two sessions, as investor cautiousness over earnings at Bank of America and some of its peers raised gold's appeal as a safe asset.
Bargain hunters also bought gold after the metal lost nearly 3% in the past two sessions to below $870, while slumping crude prices and falling U.S. stock futures also helped push up gold's investment appeal.
Gold for June delivery rose $11.10, or 1.3%, to $879 an ounce in early North American electronic trading. Gold moved higher "as financial fears returned," said George Gero, a precious-metals trader for RBC Capital Markets.
On Wall Street, U.S. stock futures slipped, with traders taking profits off the table as Bank of America kicked off a busy week of earnings reports. Although the report was better than expected, concerns about the banks remained after a Wall Street Journal report showed that banks receiving government money were lending less and less.
Investors were also awaiting earnings reports from bellwether tech companies such as International Business Machines and Texas Instruments .
Meanwhile, crude-oil futures slumped more than 5% to below $48 a barrel on economic concerns and demand worries. U.S. crude inventories have risen to their highest level in nearly two decades, the U.S. government reported last week. See Futures Movers.
Investors buy gold to protect their portfolio when other assets such as stocks and crude fall. But some analysts remained cautious on gold prices.
Gold's declines "has been prevented from further weakness by bargain hunters as well as physical jewelry interest," said James Moore, an analyst at TheBullionDesk.com. But "gold is likely to be at risk to further pressure short-term, particularly with more ETF redemptions expected."
"The metal may test down to the $820 area before finding sufficient support," he added.
Holdings in SPDR Gold Shares , the biggest exchange-traded fund backed by gold, fell to 1,105.98 tons Friday, down 13.45, or 1.2% from a day ago, according to the fund's latest data.
In other metals, silver for May delivery gained 28.5 cents, or 2.4%, to $12.075 an ounce. June palladium was up 65 cents, or 0.3%, at $234.20 an ounce, while July platinum gave up $23.40, or 1.9%, to $1,188.20 an ounce.
May copper slid 6.8 cents, or 3.1%, to $2.126 a pound.
