MW: Gold inches higher, extends gains to third day
By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures were marginally higher Tuesday, extending gains to a third session as investors sought the metal on continued economic uncertainty.
Gold for June delivery GCM2 -0.10% added $1.10, or 0.1%, to trade at $1,644.60 per ounce on the Comex division of the New York Mercantile Exchange. The rise extended a 0.9% increase in the previous session after investors reacted to a disappointing U.S. jobs report and caution ahead of corporate-earnings season supported demand for gold.
Analysts at Sharps Pixley spoke of a “rebirth of uncertainty” following the jobs report in the U.S., simmering concerns about peripheral euro-zone countries, and a higher-than-expected March CPI in China.
A slightly stronger dollar and a mixed bag for U.S. stocks pressured the metal, however.
The ICE dollar index DXY +0.11% , which compares the U.S. unit to a basket of six currencies, traded at 79.842, compared to 79.759 recorded in late trading on Monday. Read more on currencies.
U.S. stocks opened mixed, with the Dow Jones Industrial Average DJIA -0.55% and the S&P 500 SPX -0.47% falling, while the Nasdaq Composite COMP -0.37% was slightly higher.
Other metals futures were also mixed, with copper and silver tracking gold higher, and palladium and platinum posting losses.
May copper HGK2 -0.83% added less than 1 cent, or 0.2%, to $3.73 a pound. Silver for May delivery SIK2 -0.39% gained 16 cents, or 0.5%, to $31.67 an ounce.
July platinum PLN2 -1.27% declined $13.50, or 0.9%, to $1,604.20 an ounce, while palladium for June delivery PAM2 -1.76% retreated $6.05, or 0.9%, to $637.75 an ounce.
Anne-Laure Tremblay, precious-metals strategist at BNP Paribas, forecast silver, platinum and palladium will trade higher in line with gold through 2012 and 2013.
“Silver is in large supply surplus, but should follow gold higher, given its strong positive correlation with the metal, although the downside risks here are particularly pronounced,” Tremblay wrote in a research report.
“Platinum also faces a large supply surplus….[and] supply issues in South Africa will provide additional support to the price in 2012,” she said.
“Palladium’s balance should tilt back into deficit in 2012, and we expect the price to increasingly reflect this,” the report added.
Meanwhile, jewelers in India went back to work after a 20-day strike. Retail stores reopened following discussions with the finance ministry, analysts at Barclays said in a note. Stores will remain open until May 11 “pending a favorable announcement regarding the removal of the excise tax,” the analysts added.
The stores are reopening ahead of the Hindu festival in April “when demand for gold is prominent, which should support prices in the near term,” they said.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Virginia Harrison is a MarketWatch reporter based in Sydney.
