By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Gold futures eased a little Friday while silver prices took a bigger fall after Thursday’s strong rally, as the U.S. dollar inched higher.
Gold futures for delivery in April GCJ2 -0.14% were down a modest 40 cents at $1,721.80 an ounce in electronic trading during Asian hours.
The contract rose $10.90 an ounce Thursday on the Comex division of the New York Mercantile Exchange, staging a mild recovery after slumping $77.10 the preceding day.
“The rather modest bounce in gold prices [overnight] implies that the sell-off might not be over,” James Steel, analyst at HSBC Securities, wrote in a note to clients.
“Bullion was vulnerable because of its inability to clear $1,800/ounce, the rapid build in net long speculative positions on the Comex since the new year, and the paucity of emerging-market buying in recent weeks,” he said.
Steel attributed Wednesday’s sharp fall for gold to Federal Reserve Chairman Ben Bernanke’s testimony that day dampening expectations for more U.S. quantitative easing.
But he added that longer term, even without such easing, “monetary policy is still highly accommodative, and we believe this will eventually support gold price.”
May silver futures SIK2 -0.79% , meanwhile, dropped 26 cents, or 0.7%, to $35.40 an ounce following a 2.9% rally.
Among other metal contracts, April futures for platinum PLJ2 +0.58% rose 0.6% to $1,710.70 an ounce, May copper prices HGH2 +0.24% climbed 0.1% to $3.94 a pound, and palladium for delivery in June gained 0.3% to $718.55 an ounce.
The broad performance came as the ICE dollar index DXY +0.15% , which measures the greenback’s performance against a basket of six major currencies, rose to 78.838 from 78.803 late Thursday in North America.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
