MW: Gold gains as dollar slips, Europe boosts firewall
By Claudia Assis and William L. Watts, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures rose on Friday, vying to break a three-day losing streak as euro-zone finance ministers boosted the region’s firewall against the spread of the sovereign-debt crisis.
Gold futures for June delivery GCM2 +0.52% rose $8.80, or 0.5%, to $1,663.90 an ounce on the Comex division of the New York Mercantile Exchange. For the quarter, gold futures are on track for a 6.1% gain.
At the quarter end, investors are mostly sidelined as physical demand for gold remains “quiet and sentiment low,” analysts at Sharps Pixley said in a note to clients. Gold prices “are being pushed around by macro data releases and technical trading,” they said.
Traders will be waiting for the start of manufacturing data in several countries, starting with China on Sunday, to have “a better indication of where the private industry is heading,” they added.
Meanwhile, a weaker dollar also provided a boost to metals prices.
The ICE dollar index DXY -0.16% , which compares the U.S. unit to a basket of six currencies, traded at 78.905 from 79.176 in late North American trading on Thursday. The dollar index is set to end the quarter down 1.7%.
A weaker dollar tends to boost dollar-denominated commodities as it makes them cheaper for holders of other currencies.
The euro rose versus the dollar after euro-zone finance ministers on Friday agreed to temporarily raise the lending capacity of the region’s rescue funds to 700 billion euros ($934 billion) from €500 billion. Read more about the decision.
Meanwhile, the Commerce Department said Friday U.S. personal spending rose 0.8% in February, with U.S. consumers spending money at the fastest clip in seven months.
Much of the spending went to pay for higher energy costs, with incomes rising at a slower pace. Read more about consumer spending.
With U.S. equities rising, metals more closely related to industrial activities outpaced gold. May silver SIK2 +0.98% rose 39 cents, or 1.2%, to trade at $32.38 an ounce.
May copper futures HGK2 +0.66% gained 3 cents to $3.83 per pound.
