MW: Gold futures reclaim $1,650 as dollar declines
Higher after settling at nine-week low; silver’s top percentage gainer
By Claudia Assis and Barbara Kollmeyer, MarketWatch
SAN FRANCISCO (MarketWatch)—Gold futures rebounded Friday from sharp losses in the prior session as commodity markets stabilized and the dollar declined.
Gold for April delivery GCJ2 +0.86% rose $10.40, or 0.7%, to $1,653.20 an ounce on the Comex division of the New York Mercantile Exchange.
On Thursday, gold closed down $7.80 to $1,642.50 an ounce, a nine-week low, in the wake of weak China manufacturing data that weighed on commodities and global stocks.
That data came on the heels of worries earlier this week that Chinese demand for metals such as iron is waning in the face of a slowdown in growth.
Gold, usually thought as a safe-haven asset, has been pressured recently along with other commodities as it behaves more as a classic commodity. The metal is looking at a loss of less than 1% this week.
“Gold’s currently strong correlation to riskier assets continues to weigh on bullion as we touched over two-month lows in early trading yesterday,” said Andrey Kryuchenkov, analyst at VTB Capital, in a note.
He remains on guard. “Overall, despite a late price rebound last night, we still don't see sustained buying from here as investors remain extremely cautious while anemic physical buyers will also need to step up purchases at these lows,” said Kryuchenkov.
Another pressure point for gold, he said, is an ongoing strike by gold jewelers in India over a hike in import duties. “We continue to trade against the dollar and more macro pressure here could still see some more small-scale losses for gold.” China, India rock gold, oil commodity markets
As for technical levels, he said, a confirmed drop below $1,640 on Friday would lead to a pullback to a range bounded by $1,604.50 and $1,610 an ounce. Aside from that, he sees gold trading sideways above $1,640, with upside capped at the $1,670-$1,680 level.
The dollar edged lower in a reverse of Thursday’s action. The ICE dollar index DXY -0.29% , which measures the greenback’s performance against a basket of six other currencies, retreated to 79.490 from 79.654 late Wednesday. Read more in Currencies
Among other metals Friday, May silver futures SIK2 +1.63% rose 39 cents, or 1.2%, to $31.72 per ounce. Copper for the same month HGK2 +0.05% rose 2 cents, or 0.4%, to $3.78 a pound.
April platinum PLJ2 +0.35% rose $5.20, or 0.4%, to $1,629.60 an ounce.
The June contract for sister metal palladium PAM2 +0.89% rose $6.05, or 0.9%, to $657.10 an ounce.
