By V. Phani Kumar, MarketWatch
MADRID (MarketWatch) — Gold futures eased a little Friday while silver prices took a bigger fall after the prior session’s strong rally, as the U.S. dollar pushed higher.
Gold futures for delivery in April GCJ2 -0.64% were down $5.50 to $1,717.10 an ounce in electronic trading during European 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 by fully $77.10 the preceding day.
“The rather modest bounce in gold prices implies that the sell-off might not be over,” said HSBC Securities analyst James Steel told 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 wrote in a note.
Steel attributed Wednesday’s sharp retreat for gold to Federal Reserve Chairman Ben Bernanke’s testimony dampening expectations for more U.S. quantitative easing.
But over the longer term, even without such easing, “monetary policy is still highly accommodative, and we believe this will eventually support gold,” according to Steel.
Also Friday, silver for May delivery SIK2 -1.83% dropped 40 cents, or 1.1%, to $35.21 an ounce following a 2.9% rally.
Among other metal contracts, April platinum PLJ2 +0.14% rose 0.4% to $1,707.90 an ounce, while June palladium PAM2 -0.11% fell 0.5% to $716.30 an ounce and May copper HGH2 -0.45% eased 0.1% to $3.92 a pound.
The broad performance came as the ICE dollar index DXY +0.69% , which measures the greenback’s performance against a basket of six major currencies, rose to 79.111 from 78.803 late Thursday.
The dollar gained against the euro and most major rivals after January data on retail sales in Germany came in weaker than expected.
