By Chris Oliver, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures declined Friday, taking a pause after a week set to bring more than 3% in gains.
Silver futures, which spiked in the previous session, were also falling victim of profit-taking after the steep gains.
Gold for April delivery GCJ2 -0.39% declined $8, or 0.4%, to $1,778.60 on the Comex division of the New York Mercantile Exchange.
Gold settled at its highest since Nov. 11 on Thursday, buoyed by a lower dollar and fears of inflation stoked by rising oil prices.
Gold has gained nearly $53 per ounce, or 3.1% on the week so far.
The “latest rebound is starting to run out of steam and we expect (the precious metals) complex to start consolidating near current highs,” analysts at VTB Capital said in a note to clients.
Macroeconomic data in the U.S. “remain fairly positive, which continues to limit losses in the dollar and (investors) could still see a small-scale dollar rebound. For sustained gains in gold from here we would need a much weaker dollar relative to the euro for a sustained period, which is unlikely for now,” they added.
Gains on a renewed bout of risk aversion could still be possible, but it would require “a credit event” in the euro zone, which the analysts ruled out in the near term.
March silver SIH2 -0.33% lost 5 cents, or 0.1%, to $35.53 an ounce. Weekly gains for silver hovered around 4%.
Analysts at GFT Markets in London said a combination of fresh buying and the exit of investors holding bearish short positions on metals helped to stoke recent gains.
The stronger tone came as metals broke above key technical indictors or approached levels of overhead price resistance, they added.
Most metals tracked gold and silver lower, with copper advancing. Copper for March delivery HGH2 +0.37% added 1 cent, or 0.3%, to $3.82 per pound.
Copper stockpiles registered on the Shanghai Futures Exchange have fallen for the first time since early December, analysts at Commerzbank said.
“This offers a glimmer of hope” for copper as the prior inventory build there fueled fears Chinese demand could weaken, the analysts said. “The inventory build was one of the reasons why the price of copper has shown something of a sideways trend for a number of weeks now,” they added.
Platinum and palladium, meanwhile, declined, with April platinum PLJ2 -0.48% down $8.50, or 0.5%, to $1,714 an ounce. March palladium PAH2 -0.96% was off $7.35, or 1%, to $710.55 an ounce.
