MW: Gold futures waver after last week’s sharp gain
Narrow moves for most metals; July silver in retreat
By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures traded between small losses and gains Monday, steadying after posting their biggest one-day advance since August in the previous session, as investors weighed the odds for further U.S. monetary easing by the Federal Reserve.
At last check, gold for August delivery GCQ2 -0.45% fell $2.90, or 0.2%, $1,619.20 an ounce on the Comex division of the New York Mercantile Exchange, moving between a high of $1,629.70 and a low of $1,616.
On Friday, gold rallied 3.7%, adding $57.90 to settle at $1,622.10 an ounce in New York trading.
That move marked the largest single-session percentage and point gain for a most-active contract since August 2011, according FactSet Research data. For the week, gold was up 3.4%. Read more on Friday's gold move.
Gold “absolutely exploded” after the disappointing U.S. jobs-growth data led the market to believe that additional quantitative easing, or QE, is “now very much on the table,” said Tom Essaye, editor of the 7:00’s Report, a daily commentary on equity and commodity markets and the economy.
More monetary stimulus is widely expected to translate into a boost for gold prices, as investors worried about currency debasement seek an alternative store of wealth.
“While certainly there were a lot of people buying gold ahead of potential additional QE, I think a lot of Friday’s move was also a lot of short covering,” Essaye said, noting that gold clearly broke through resistance dating back to its collapse in March.
“The question now is do we buy gold here, and I’m inclined to say ‘no’ at this point,” he said.
Meanwhile, riskier assets, such as equities, took a pounding in Asia following on Friday’s U.S. data and a survey Monday out of China showing the services sector expanded at its weakest pace in more than a year. Read more on China’s services sector.
Gold failed to find support after the Commerce Department reported that U.S. factory orders fell 0.6% in April. Economists surveyed by MarketWatch had expected orders to rise by 0.1%.
U.S. stocks traded in a choppy pattern Monday, declining after opening higher only to reverse again, and in Europe, German stocks fell, but banks rose across the Continent on hopes of a bailout plan for the region’s institutions. Read more on Europe markets.
Among other metals, platinum for July delivery PLN2 -0.20% rose $4.40, or 0.3%, to $1,437.60.40 an ounce and September palladium tacked on 60 cents, or 0.1%, to $614.60 an ounce.
July silver SIN2 -1.18% traded at $28.36 an ounce, down 16 cents, or 0.6%, while July copper HGN2 +0.69% added 2 cents, or 0.7%, to $3.34 per pound.
Myra Saefong is a MarketWatch reporter based in San Francisco.
Sarah Turner is MarketWatch's bureau chief in Sydney. Barbara Kollmeyer in Madrid contributed to this report.
