MW: Gold edges lower, but on track for weekly rise
By William L. Watts, MarketWatch
NEW YORK (MarketWatch) — Gold futures dipped into negative territory Friday morning but remained on track for a weekly gain and a finish above $1,200 an ounce, as metals continued to take in stride the Federal Reserve’s decision this month to begin tapering its bond purchases.
Gold for February delivery GCG4 +0.01% was down $1.80, or 0.1%, at $1,210.50 an ounce on the New York Mercantile Exchange. The contract was on track for a 0.6% weekly gain, according to FactSet.
March silver SIH4 -0.08% fell 8 cents, or 0.4%, to $19.84 an ounce but was up 2% on the week.
It has been a brutal year for gold, with the metal down by around 28% since Jan. 1, while silver has dropped around 34% over the same period. Expectations the Fed would begin to scale back its stimulus program helped sink gold earlier this year, while a strong run by equities contributed to flows out of gold, analysts noted.
“As we begin 2014, headwinds will still present themselves with investors being bearish bonds and bullish stocks on raised growth expectations and the continued normalization of interest rates,” said Ole Hansen, head of commodity strategy at Saxo Bank, in a note.
“December will show a fourth month in a row of negative returns; momentum and trend following investors will not be changing their outlook or positioning unless we see a much stronger move to the upside,” Hansen said. “Traders will continue to favor selling into rallies until we see a potential break back above the December high” at $1,268 an ounce.
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In other metals trading, January platinum PLF4 +0.50% rose $7.30, or 0.5%, to $1,370 an ounce, while March palladium PAH4 +0.89% added $6.25, or 0.9%, to $707 an ounce.
High-grade copper for March delivery HGH4 -0.52% fell 2 cents, or 0.6%, to $3.38 a pound.
