MW: Gold prices back to six-week high on weaker dollar
Platinum, palladium rise after U.S. data show auto output on rise
By Claudia Assis and Kate Gibson, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold futures found their way back to gains Tuesday as a weaker dollar and expectations of growing interest from end users brought futures back to a six-week high.
Gold had see-sawed after industrial production in the U.S. rose more than expected, which sapped some of the safe-haven support gold had enjoyed earlier in the session.
Gold for December delivery added $1, or 0.1%, to $1,227.30 an ounce on the Comex division of the New York Mercantile Exchange. A settlement around these levels would be the highest since late June.
"Everything about this market is looking up," said Scott Meyers, a senior trading analyst with Pioneer Futures, a division of MF Global, in New York. From hitting bottom in late July, when gold settled at $1,158 an ounce, "it has been a steady climb ... you got to love gold," he said
On Monday, the contract closed at $1,226.20 an ounce, its highest close since late June.
Gold had lost some of its way after the Federal Reserve said Tuesday the output of the nation's factories, mines, and utilities rose 1% in July. Economists surveyed by MarketWatch had expected a 0.6% increase.
Equities opened higher on Tuesday on the data, although gains were moderate.
Gold kept drawing support, however, from the weaker dollar and steady appetite from buyers of physical gold, mainly in Asia.
"Continued fears over the economic outlook have encouraged investor appetite for gold over the last couple of weeks. Asian buyers have been steady, although there is evidence that some end users have been cashing in on the higher levels," noted analysts at Action Economics.
Physical buying interest out of India ahead of the festival season should support prices in the near term, the analysts added.
Meyers saw room for gold to rise to $1,250 an ounce in the near future.
The dollar slid on Tuesday, with the dollar index (DXY 82.27, -0.27, -0.32%) , which contrasts the greenback to six currency rivals, falling 0.2% to 82.31.
A weaker dollar is generally a boost to commodities, as it makes them less costly for holders of foreign currencies.
Platinum, palladium rise
Other metals, more tightly connected to industrial uses, got a boost from the industrial production data and surpassed gold's gains.
Copper for September delivery added 6 cents, or 1.8%, to $3.34 a pound.
The industrial production data also showed a share rise in auto production that bolstered output in July. Platinum and palladium, heavily used in the auto industry as essential components of auto catalysts, were posting gains.
Palladium for September delivery added $11.65, or 2.4%, to $497.40 an ounce. Platinum for October delivery rose $7.40, or 0.5%, to $1,545.90 an ounce.
Meanwhile, a New York hedge fund disclosed a large, new stake in SPDR Gold Trust (GLD 119.86, +0.13, +0.11%) , the biggest exchange-traded fund backed by gold. The firm, Eton Park Capital Management LP, is led by former Goldman Sachs trader Eric Mindich.
Eton Park held almost 6.6 million shares of the ETF at the end of June. Read more about the stake here.
As of Monday, the latest day for which statistics were available, holdings at the ETF remained unchanged at 1,286 metric tons, from 1,285 tons earlier last week.
