Metal facing headwinds, however, as ‘air getting thinner’
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures inched higher, trading in record territory after wavering in early action Thursday.
The metal fluctuated between small gains and losses earlier, supported by momentum-buying and heightened concerns about periphery European countries but feeling the pinch of an interest-rate increase in the euro zone and a higher dollar.
Gold for June delivery (GCM11 1,462, +3.20, +0.22%) added $2.80, or 0.1%, to $1,461 an ounce on the Comex division of the New York Mercantile Exchange.
Silver also kept its run, trading in a 31-year high territory. May silver (SIK11 3,949, +10.30, +0.26%) added 17 cents, or 0.4%, to $39.61 a barrel.
“A new day, a new high ... for gold and silver,” analysts at Commerzbank said in a note to clients. “Despite that, the air will be getting thinner at the current high price levels.”
Portugal bowed to pressure Wednesday and requested financial aid from the European Union rescue fund. See more about Portugal.
The European Central bank raised rates on Thursday for the first time since 2008, in a widely anticipated move that many analysts believed it was already factored in the price of gold. Read more about Europe's rate hiking.
The breakout, however, has not been followed by inflow into gold-backed exchange-traded funds. The world’s largest gold ETF, SPDR Gold Trust (GLD 142.54, +0.16, +0.11%) , reported outflows of 7 metric tons as of Wednesday, ending the day at 1,205 metric tons according to its web site.
