MW: Gold edges higher after previous week’s drop
By Claudia Assis and Chris Oliver, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold prices inched higher Monday, gathering some strength after sharp drops in the previous week and the dollar was weaker.
Gold for August GCQ2 +0.42% delivery was rose $7.10, or 0.4%, to trade at $1,586 per ounce on the Comex division of the New York Mercantile Exchange.
The metal dropped $30.50, or 1.9%, on Friday, notching a weekly loss of 1.6% as the U.S. jobs report disappointed.
Earlier Monday, China’s statistics bureau said consumer-price inflation eased to 2.2% for June, its lowest level in 29 months, while the contraction in producer prices deepened. Read more on Chinese inflation data.
HSBC analysts described the inflation data as “fast falling” and said they paved the way for a shift to aggressive policy easing.
“Beijing policy makers are responding actively to hold up growth,” HSBC analysts said in a note Monday.
In other precious-metals trade, silver for September delivery SIU2 +1.69% gained 41 cents, or 1.5%, to $27.34 an ounce.
Silver tracked the sharp decline in gold prices on Friday, shedding 2.4% for the week.
Analysts at GFT Markets said in a note Friday that the future trend for the metals would likely hinge on whether the U.S. Federal Reserve institutes more easing.
“Without additional liquidity measures, precious metals could struggle to make much headway this summer. Gold may find support around $1,580 and $1,550 below there. But silver looks likely to retest its December low if it breaks below $27 again,” the analysts said.
Also Friday, HSBC reaffirmed its positive medium-term view on gold. The bank’s U.S.-based economists said the late week jobs data showed employment growth slowed in the second quarter and a kept “the possibility of further Fed easing in prospect.”
A weaker dollar offered some respite for gold and other dollar-denominated commodities. The ICE dollar index DXY +0.02% , which compares the U.S. unit to a basket of six currencies, declined to 83.237, from 83.359 in late North American trade on Friday.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.
