By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures on Friday gave back some of the previous session’s gains as markets were roiled by China’s increase in reserve requirements for banks.
Gold for December delivery (GCZ10 1,352, -0.60, -0.04%) declined $6.80, or 0.5%, to $1,348.30 an ounce on the Comex division of the New York Mercantile Exchange. The contract rose earlier, and hit an intraday high of $1,362.90 an ounce in electronic trading. Stocks and oil also fell.
China’s central bank announced Friday banks will have to put up 0.5% more in reserve requirements as the country battles higher inflation. Read more on China.
China, alongside India, is a top gold consumer and any moves to raise borrowing costs would make it harder for the Chinese to stock up on gold.
Longer-term, however, gold “should continue to remain well supported too, both by the growing debt crisis in the euro-zone peripherals, which could spill over to other countries at any time, and the expansion of liquidity on the back of renewed quantitative easing of U.S. monetary policy and the weaker U.S. dollar as a result,” analysts at Commerzbank said in a note to clients Friday.
Silver and most metals tracked gold lower. Silver for December delivery (SIZ10 2,682, -1.40, -0.05%) declined 24 cents, or 0.9%, to $26.59 an ounce. December copper (HGZ10 384.30, +1.20, +0.31%) retreated a penny to $3.82 a pound.
Palladium (PAZ10 705.00, +9.50, +1.37%) , however, bucked the trend to add $2.75, or 0.4%, to $698.25 an ounce. The metal has been surging on fresh concerns that Russian palladium stockpiles are dwindling, Jim Steel, an analyst with HSBC in New York, said in a note to clients Friday.
While “we also believe Russian stockpiles to be declining, the level of stocks is a state secret, and the precise level of inventories is therefore unknown. As the Russian stockpile story is recycled, (palladium and platinum) prices may become more volatile. This notwithstanding, we remain positive on platinum and palladium prices for the longer term,” he said.
Platinum for January delivery (PLF11 1,668, +3.80, +0.23%) was off $11.90 at $1,652.70 an ounce.
