By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures swerved between small gains and losses Friday as the dollar rose, pressuring the metal and other commodities, as investors waited to hear from the Group of Seven top industrialized nations.
Support came from a sharp decline in stocks following news a top European Central Bank member had resigned over disagreements with the bank’s bond-buying purchases. Read more about ECB’s Stark stepping down.
Gold for December delivery GC1Z +0.60% rose $2.70, or 0.1%, to $1,859.90 an ounce on the Comex division of the New York Mercantile Exchange.
Governing Council member Juergen Stark’s resignation underscored the divisions still ripping through the 17-nation euro zone. U.S. equities traded sharply lower after the news.
But a rising dollar kept a lid on significant gains. The dollar index DXY +1.25% , which measures the U.S. unit against a basket of six major rivals, was up to 77.136, gathering steam as the day progressed and up from 76.284 late Thursday in North American trading. Read more about the dollar in Currencies.
A stronger dollar is a negative for gold and other commodities as it makes them more expensive for holders of other currencies.
Meanwhile, finance ministers and central bankers of the seven most industrialized nations are meeting in the French port city Marseilles Friday.
Investors hope they will bring forward measures to jump-start the global economy.
Late Thursday, President Barack Obama unveiled a $440 billion plan to create jobs and boost the U.S. economy, using a combination of tax cuts and government spending. Investors had expected a plan around $300 billion. See story on Obama.
Other metals tracked gold lower, with December silver SI1Z -1.14% off 89 cents, or 2.1%, to $41.60 an ounce. December copper HG1Z -3.49% declined 11 cents, or 2.6%, to $4.03 a pound.
Gold and most metals ended higher Thursday, as dovish comments by European Central Bank President Jean-Claude Trichet “sent the euro on a nosedive and gold has made strong gains, despite the firmer U.S. dollar,” analysts at Commerzbank said in a note to clients.
That marked change in direction by the ECB, which “stressed the downside risks for the economy and considers inflation risks as balanced,” the analysts said.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
