Prices poised for 10% gain on year; silver set for yearly loss
By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures climbed Friday, rebounding after dropping nearly 5% over the past six sessions and ready to end a tumultuous year with a gain of around 10%.
The February gold futures contract GC2G +1.96% rose $32.90, or 2.1%, to trade at $1,573.80 an ounce on the Comex division of the New York Mercantile Exchange.
Futures prices had lost 4.7%, or nearly $77, in a six-session losing streak, but they’re still on track for a gain of around 10% for the year after closing out last year at $1,421.40.
Quarter-to-date, they’re down about 3%.
“Given the ongoing debt problems facing many economies and record low interest rates, we still expect the bull-run in gold to continue with the metal to rebound across 2012,” said James Moore, an analyst at TheBullionDesk.com, in a note.
Analysts blamed the recent losses in gold on year-end book squaring but on Friday, the lower gold prices offered investors a chance to buy back into the market.
“Gold investors in 2012 should watch two things above all others — zero rates and the risk of a China crash,” said Adrian Ash, head of research at BullionVault.
“We know the first is nailed on, for bank deposits at least, if not for weaker euro-zone debt,” he said in emailed comments. “That’s slowly driving people to seek out a more reliable, tightly-supplied store of wealth.”
But in China, “deregulation of gold only began a decade ago,” he said. “No one knows what happens to the world’s second-heaviest consumer when household incomes reverse.”
The metals market saw broad gains to track gold higher Friday.
March contract for silver SI2H +2.76% climbed 3%, or 81 cents, to $28.13 an ounce. Futures prices are ready to end the year around 9% lower.
Copper for March delivery HG2H +1.62% was up 6 cents, or 1.7%, at $3.43 a pound, with futures prices trading more than 20% lower for the year.
March palladium PA2H +4.04% added $23.50, or 3.8%, to $647.25 an ounce, with futures prices down about 19% for the year. April futures for platinum PL2J +2.22% climbed $29.20, or 2.1%, to $1,396 an ounce, and prices for the metal poised for a more than 20% year-on-year loss.
Myra Saefong is a MarketWatch reporter based in San Francisco.
