By Virginia Harrison, MarketWatch
SYDNEY(MarketWatch) — Gold futures lost ground in electronic trading Friday as the dollar strengthened against major rivals.
Gold for August delivery GC1Q -0.15% declined $1.70, or 0.1%, to $1,501.10 an ounce on the Comex division of the New York Mercantile Exchange during Asian trading hours.
The dollar index DXY -0.02% , which measures the performance of the U.S. unit against a basket of six rival currencies, rose to 74.463, from 74.314 in late North American trading on Thursday. A stronger greenback tends to discourage investment in dollar-priced commodities such as gold.
Gold futures declined in New York trading on Thursday after some uncertainty about the euro zone’s debt problems lifted. Read more on Thursday's metals action.
Despite the recent weakness, gold prices remain 5.6% higher this year according to data from FactSet.
Analysts at BNP Paribas said gold has been supported by inflationary pressures and some safe-haven buying as a result of the eurozone debt crisis.
“The surge in inflationary pressures goes a long way towards explaining the strong demand growth for gold, notably in India and China, as consumers seek to hedge themselves against rising prices,” the analysts said.
The analysts forecast the gold price to average $1,510 an ounce in 2011 and $1,600 an ounce in 2012.
The broader metals complex tracked gold lower, with silver for September delivery SI1U -0.81% shedding 21 cents, or 0.6%, to $34.62 an ounce. September copper HG1U -0.65% lost 3 cents, or 0.6%, to $4.25 a pound.
Platinum for October delivery PL1V -0.22% declined $5.60, or 0.3%, to $1,720.50 an ounce, as the September contract for sister metal palladium PA1U -0.68% lost $9.55, or 1.3%, to $751.10 an ounce.
Virginia Harrison is a MarketWatch reporter based in Sydney.
