Two-day drop of nearly $40, weak U.S. dollar buoy gold
By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures climbed Friday, with a loss of nearly $40 an ounce in previous sessions and weakness in the U.S. dollar helping to buoy demand for the metal as traders continued to monitor news out of the euro zone.
Gold for December delivery GC1Z +0.89% rose $13, or 0.7%, to trade at $1,772.60 an ounce on the Comex division of the New York Mercantile Exchange. Futures prices were poised for a weekly gain of around 1%.
Recent declines in gold in the wake of a fall in Italian bond yields have “created a good entry opportunity for investors wishing to enter the market at an attractive level,” said Ross Norman, chief executive at London-based bullion broker Sharps Pixley, in note Friday. Read about gold’s popularity among younger investors.
Italian bond yields declined as concerns about the nation’s debt crisis eased.
Italy’s Senate approved on Friday a budget law that includes new austerity measures. That clears the path for the parliament’s lower chamber to pass the law on Saturday and Prime Minister Silvio Berlusconi to resign. Read about European markets.
For gold, however, “as if the economic concerns were not great enough, the Iran nuclear debate rumbles and is the wild card,” said Norman. “It adds an uncomfortable geopolitical dimension to the economic crisis — and this continues to be deeply supportive of gold.” Read about gold miners as a safe haven.
The International Atomic Energy Agency reportedly issued a report earlier this week saying it has “serious concerns” about Iran’s nuclear program.
Gold appeared unfazed by U.S. economic data Friday. Consumer sentiment rose to 64.2 in the preliminary reading for November, compared with a final October reading of 60.9, according to a report from the University of Michigan and Thomson Reuters. Read about consumer sentiment.
Weakness in the U.S. dollar, which makes gold less expensive for holders of other currencies, also provided some support for the metal. The dollar index DXY -0.70% , which tracks the U.S. unit against a basket of six major rivals, slipped to 77.227 from 77.660 late Thursday.
Against this backdrop, prices for other metals were trading higher, with silver, platinum and palladium poised for gains of 1% or less for the week, but copper set for a weekly decline around 4%.
December copper HG1Z +1.72% was up 4 cents, or 1.1%, to $3.41 a pound. Silver for December delivery SI1Z +0.88% tacked on 33 cents, or 1%, to $34.44 an ounce.
January platinum PL2F +0.68% rose $11, or 0.7%, at $1,638.30 an ounce and December palladium PA1Z +1.72% added $11.05, or 1.7%, to $658.85 an ounce.
