By Claudia Assis and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures rose on Friday, recovering some of this week’s heavy losses as the fire-sale prices enticed buyers back to the market and the metal vied to break a four-day losing streak with aplomb.
Gold for February delivery GC2G +0.96% rose $15.30 an ounce, or 1.1%, to $1,592.60 on the Comex division of the New York Mercantile Exchange.
Some bottom fishing after gold lost nearly $140 in the past four sessions was at play, said Charles Nedoss, a senior market strategist with Olympus Futures in Chicago. At the same time, however, gold lacked impetus to go above $1,600 an ounce, he said.
Gold is likely to go higher next week as the dollar is expected to lose more ground, barring any negative headlines from Europe, Nedoss added.
Safe-haven continued to be absent. “In the short term, gold’s function as safe haven is in really shaky shape,” he said.
Gold took a pounding this week after investors nervousness over developments in Europe turned to the U.S. dollar and U.S. Treasurys for cover.
In recent weeks, gold has tended to follow the broader market as with each worsening headline from Europe, investors have turned to the cash investments.
“Over the past three months, the correlation of gold to euro/dollar has risen to over 50%. This is likely to have occurred as U.S. dollar strength is no longer being accompanied by inflows into physically backed gold exchange-traded funds,” said Deutsche Bank commodity strategists.
The dollar scaled back some of its recent gains Friday after a better-than-expected result for a Spanish debt auction, and better-than-expected U.S. jobless claims data Thursday, clearing the way for gold to gain.
The dollar index DXY -0.08% , which compares the U.S. unit to a basket of six currencies, traded at 80.148 from 80.292 in North America trade late Thursday.
Gold “has proved resilient before, with the help of physical/central bank/investor buying,” said Robin Bhar, an analyst at Credit Agricole.
The potential for more quantitative easing from major central banks may be supportive for gold, while reserve managers interested in diversifying from the U.S. dollar “will likely see gold as an increasingly more attractive investment,” the analyst said.
Other metals tracked gold higher, also seeking to erase the steep losses earlier in the week. March silver SI2H +0.89% rose 28 cents, or 0.9%, to $29.53 an ounce. March copper HG2H +1.81% gained 6 cents, or 1.8%, to $3.34 a pound.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Sarah Turner is MarketWatch's bureau chief in Sydney.
