SYDNEY (MarketWatch) — Gold futures edged lower in electronic trading on Monday ahead of market holidays in the U.S. and U.K., but analysts forecast prices would trend higher as global economic uncertainties support demand for the metal.
Gold for August delivery GCQ11 +0.08% , the most-active contract, fell 80 cents, or 0.1%, to $1,535.50 an ounce on the Comex division of the New York Mercantile Exchange during Asian trading hours.
Silver moved higher, with the July contract SIN11 +0.38% rising 28 cents or 0.8% to $38.15.
It was a skittish session for gold, which had traded in positive territory earlier.
Last week, gold prices gained 1.8%, with buying supported by concerns about euro-zone debt levels and a weaker dollar, which can encourage investment in dollar-priced commodities such as metals.
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BNP Paribas forecast gold prices will trend “moderately higher” for the rest of the year, to average $1,500 an ounce, before peaking at $1,600 an ounce in 2012.
The analysts said an interest-rate hike in the U.S. before mid-2012 would weigh on prices, in addition to the euro-zone debt fears, but risks to its gold forecast “remain skewed to the upside.”
“The pace of monetary tightening by central banks and the evolution of inflation expectations will be key factors to watch over the coming months. If confidence in central banks to keep inflationary pressures in check deteriorates, the gold price would likely perform better, and continue to rally well into 2012,” BNP Paribas said.
The euro-zone fiscal crisis and ongoing concerns about the U.S. economy, should continue to support demand for gold as a safe-haven asset in the short term, the analysts said.
The dollar index DXY -0.05% , which measures the greenback against a basket of six other major currencies, fell to 74.893, from 74.911 late Friday. Read more about currencies.
The broader metals complex was mixed during Asian trading hours on Monday.
Copper for July delivery eased back 3 cents, 0.7%, to $4.16 a pound.
Platinum for July delivery PLN11 +0.11% dropped $4.00, or 0.2%, to $1,796.00 an ounce, while sister metal palladium PAM11 +0.15% ticked higher, with the June contract gaining 5 cents to $759.95 an ounce.
Virginia Harrison is a MarketWatch reporter based in Sydney.
