By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) — Gold prices step higher, working for their fifth straight up day, even as some analysts cautioned the gains could be fleeting.
“From the longer term investor perspective, the late price rally is only temporary,” said Andrey Kryuchenkov of VTB Capital, in a note Tuesday.
He said the advance has been “pre-dominantly driven by uncertainty in Iraq where the government in Baghdad is struggling to halt the rapid advance of Sunni militants.”
Gold for August delivery GCQ4 +0.28% added $4, or 0.3%, to $1,322.40 an ounce on the Comex division of the New York Mercantile Exchange. On Monday, the shiny metal inched higher, building slightly on last week’s advance of 3.3%.
In Iraq on Tuesday, embattled Prime Minister Nouri al-Maliki and other top Iraqi politicians reportedly have pledged to start forming a new government by July 1, according to a Wall Street Journal article.
But Ukraine-Russia tensions might be easing, as Russian President Vladimir Putin on Tuesday asked parliament to rescind his authorization to use military forces in Ukraine . That marks a potentially major step toward de-escalating the crisis there, said a Wall Street Journal story.
In European economic news, Germany’s Ifo index signaled that business confidence in that country decreased more than expected in June, hit by Iraq and Ukraine worries.
“The downbeat Ifo report adds more weight to the notions that the European Union’s economy remains in serious trouble,” said Jim Wyckoff, senior analyst at Kitco.com, in a note Tuesday. “This is also an underlying supportive factor for the safe-haven gold market.”
Beyond safe-haven demand, Wyckoff said a “much-improved technical posture” is helping to fuel “upside price pressure” for the yellow metal.
Meanwhile, top-performing gold-market timers aren’t convinced that the yellow metal’s low earlier this month marked the beginning of a new leg upward, reports MarketWatch’s Mark Hulbert.
In U.S. economic news on Tuesday, the S&P/Case-Shiller’s 20-city composite index indicated home prices rose 1.1% in April. Fresh figures for new home sales and consumer confidence are due at 10 a.m. Read more: Home prices up sharply but home sales, not so much
In other metals action, July silver SIN4 +0.59% gained 12 cents, or 0.6%, to $21.04 an ounce.
July platinum PLN4 +1.15% rose $17.80, or 1.2%, to $1,474.40 an ounce, while September palladium PAU4 +0.89% added $9.10, or 1.1%, to $831.75 an ounce.
High-grade copper for July delivery HGN4 -0.02% was roughly unchanged at $3.15 a pound.
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