Bigger percentage losses for copper, palladium and platinum
By Myra P. Saefong and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures fell Friday, trading off the session’s low but set to post a loss for the week, on the heels of comments by the top U.S. central banker that squashed hopes of immediate stimulus and as President Barack Obama’s remarks on Europe took on a harsher tone.
Gold for August delivery GCQ2 +0.03% lost $2, or 0.1%, to $1,586 an ounce on the Comex division of the New York Mercantile Exchange, recovering after touching a low of $1,556.40. Prices traded around 2.2% lower for the week.
“Gold is always a speculation on monetary policy, but the last week’s action shows leveraged traders treating it like live in-running sports gambling,” said Adrian Ash, head of research at BullionVault.
“Up on nonfarm [payrolls data], back down on Bernanke — gold continues to lack direction versus the dollar near-term, but the clear trend for euro-zone buyers is higher,” he said in emailed comments. “And just like early last summer, that’s where the imminent crisis is.”
Gold prices slumped 2.8% on Thursday after Federal Reserve Chairman Ben Bernanke in testimony to Congress failed to signal that more monetary easing measures were on the way.
The Fed’s willing to act should the European debt crisis worsen, Bernanke said, but he offered no hint of what the Fed might do at its next policy meeting. The Federal Open Market Committee is scheduled to meet June 19 and 20. Read more on Bernanke.
On Friday, in comments to reporters in the White House, President Obama took on a more strident tone toward Europe, urging the region’s leaders to aid the troubled banking sector and warning that Greece shouldn’t leave the euro zone. Read more on Obama.
“All Obama did today was urge action in Europe and list a couple of quick-fixes,” said Ash. “If he’d urged the same to Washington, it might mean something.”
Metals traders also digested the latest news on the economic front.
Data covering the month of April from the U.S. showed that the trade deficit shrank as exports retreated for the first time since November, while wholesale inventories gained 0.6% to a seasonally adjusted $483.5 billion.
And in Germany, exports sank 1.7% in April from a month earlier, marking the first decline in exports this year. Read about the U.S. trade gap.
“Few markets care about trade stats or producer-price data at the moment, least of all precious metals,” Ash said. “That might change after China’s flood of numbers this weekend. But the real data point for traders right now is anything pointing to more, or less monetary inflation.”
China is due to release a raft of economic data, including inflation, industrial production and retail sales for May and monthly trade figures.
Dollar weighs
Dollar-denominated metals prices came under further pressure from a stronger dollar. The ICE dollar index DXY +0.45% , which measures the greenback against a basket of six rival currencies, climbed to 82.625 from 82.241 late Thursday.
Equities markets in Asia fell following Bernanke’s testimony as well as a fresh downgrade of Spain’s credit rating. Fitch Ratings late Thursday cut the country’s credit rating by three notches, to BBB from A, pushing it closer to junk status.
But U.S. stocks turned narrowly higher and European stocks were mixed amid speculation that Spain would ask for banking-sector aid over the weekend. Read more on U.S. stock action.
The broader metals complex tracked gold lower, with copper the leading laggard as its July contract HGN2 -2.26% dropped 7 cents, or 2.2%, to $3.30 a pound. Prices traded 0.3% lower than the week-ago closing level.
July silver SIN2 -0.35% fell 16 cents, or 0.6%, to $28.37 an ounce, trading 0.5% lower for the week.
July platinum PLN2 -0.93% lost $15.70, or 1.1%, to $1,425.20 an ounce, leaving it down 0.6% for the week to date, while September palladium sank $11.75, or 1.9%, to $614 an ounce, unchanged from the week-ago close.
Myra Saefong is a MarketWatch reporter based in San Francisco.
Virginia Harrison is a MarketWatch reporter based in Sydney. Sara Sjolin in London contributed to this report.
