By Polya Lesova, MarketWatch
NEW YORK (MarketWatch) — Gold futures rose on Monday, rebounding from the previous session when metal fell sharply on indications that the Federal Reserve may end quantitative easing this year.
Gold for February delivery GCG3 -0.24% gained $7.10, or 0.5%, to $1,656 an ounce in electronic trading on Globex.
The contract slumped 1.5% on Friday on the Comex division of the New York Mercantile Exchange after minutes from the Fed’s latest policy meeting showed that several officials thought the central bank will be able to slow or end bond purchases before December this year.
Quantitative easing is a major source of liquidity that weakens the U.S. dollar and helps support prices of a range of assets, including gold.
In South Africa, Harmony Gold Mining Co. HMY -4.24% ZA:HAR -3.46% said Monday its Kusasalethu gold mine will remain closed until it is viable to operate safely and profitably. The decision follows labor unrest at the mine. The firm also said that as a result of the closure of the mine, it will produce only 1.2 million ounces of gold this financial year, rather than the 1.3 million ounces it had previously forecast.
“Admittedly, this is unlikely to have any great impact on prices; we view gold primarily as a monetary asset or as insurance — yet it does reveal that rising production costs can offer gold as a commodity a degree of downside support,” analysts at Commerzbank wrote in a note to clients.
In other metals trading, March silver futures SIH3 -.00% rose 27 cents, or 0.9%, to $30.22 an ounce and April platinum futures PLJ3 -2.34% gained $4.20, or 0.3%, to $1,562.70 an ounce.
In contrast, March palladium futures PAH3 -1.55% fell $4.65 to $683.85 an ounce and March copper futures HGH3 -0.87% dropped 3 cents to $3.66 a pound.
In the currency markets, the dollar index DXY -0.01% , which tracks the performance of the greenback against a basket of other major currencies, gained 0.2% to 80.625. Read: Dollar rebounds with eyes on Fed outlook.
Polya Lesova is MarketWatch's New York deputy bureau chief. Follow her on Twitter @PolyaLesova.
