MW: Gold futures rebound after last week's thumping
By Claudia Assis & Deborah Levine, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold and other metals futures saw a bounce on Monday, as some investors waded back into the yellow metal after last week's sharp retreats.
Gold futures for June delivery rose $11.60, or 1%, to $1,187.80 on the Comex division of the New York Mercantile Exchange.
Gold dropped by $51.70 last week, the worst weekly dollar drop since the five-day period ending Feb. 27, 2009.
The slide was due to renewed worries over the impact of European government debt, stoked by Germany's decision to implement a ban on naked short-selling ban of financial stocks, euro-zone bonds and sovereign-debt credit-default swaps.
"We remain bullish on the gold price; although we acknowledge that an increasing share of investment consumption in global gold demand will continue to increase volatility in the gold price," said John Meyer, an analyst at Fairfax in London.
"Although market sentiment remains cautious and prices have sidelined constructive fundamental developments, prices showed signs of stabilizing on Friday as the euro regained some ground against the dollar and equity markets rebounded," analysts at Barclays Capital said in a report.
Though the euro (CUR_EURUSD 1.2361, -0.0182, -1.4508%) was under pressure again Monday after the Bank of Spain rescued a lender over the weekend, the coinciding dollar strength didn't damage the metals complex.
The dollar index (DXY 86.41, +1.03, +1.21%) , which compares the U.S. currency to a basket of six other currencies, rose 1.15 to 86.30. Read more on euro, dollar.
Chintan Karnani, chief analyst for Insignia Consultants, said the return to gold came as the $1,166-an-ounce level provided a technical support. The yellow metal needs to break through $1,207 this week or else the contract may fall to levels of $1,147 or $1,124, he added.
Palladium led the metals rebound, up 2.5% Monday. Palladium for June delivery added $10.80 to $450.25 an ounce on Comex.
Platinum futures for July added $25.80, or 1.7%, to $1,527.80 an ounce. "Chinese buying has picked up substantially as prices have fallen with high levels of volume traded on the Shanghai Gold Exchange at the end of last week," the Barclays analysts said.
Silver for July delivery added 21 cents, or 1.2%, to $17.86 an ounce. Copper for July delivery advanced 5 cents, or 1.5%, to $3.11 a pound.
