MW:Gold prices get extra boost as dollar, Nikkei fall
By Carla Mozee, MarketWatch
MADRID (MarketWatch) -- Gold prices shot higher on Thursday, aiming for a second straight day of gains, as the dollar tumbled below a key level against the Japanese yen, coinciding with another big drop for stocks in Japan.
Gold for August delivery GCQ3 +1.05% rose $15.10, or 1.1%, to $1,406.90 an ounce in electronic transactions. Prices on Wednesday settled higher by $12.10, or 0.9%, on the Comex division of the New York Mercantile Exchange.
Gold went from around a $5 gain to $15 an ounce after another volatile day for Japanese equities.The Nikkei Stock Average JP:NIK -5.15% , which had been dropping throughout most of Thursday’s session, closed down 5.2%, with the biggest losses coming in the last hour or so of trade.
In turn, the dollar fell below ÂĄ101 as investors backed out of equities and moved into the Japanese currency. Dollar weakness tends to lift prices for dollar-denominated commodities, as it makes them less expensive for holders of other currencies to buy.
“Gold continues to form a bullish ascending triangle base below $1,400, with key support currently in place near $1,380,” said CMC Markets senior market analyst Colin Cieszynski to clients Wednesday.
Wednesday’s move higher for gold was aided by strength in the euro EURUSD +0.21% against the U.S. dollar, and the euro on Thursday extended gains against the greenback. The shared currency traded at $1.2953 compared with $1.2930 seen in North American trading a day prior.
The gold market has had some support from physical buying in Asia, analysts have said. Asian gold demand from this April to June is expected to reach a quarterly record, the World Gold Council said Wednesday, according to media reports.
But outflows from gold exchange-traded funds and cuts in forecast for gold prices have also weighed on the precious metal, which is on pace to fall 5.5% in May. Earlier this month, it had been on track for a decline of more than 7%.
Elsewhere in the metals complex Thursday, July copper HGN3 -0.29% fell 1 cent, or 0.2%, to $3.29 a pound, but July silver SIN3 +0.59% rose 10 cents, or 0.5%, at $22.56 an ounce.
September palladium PAU3 +0.57% , now the most-active contract, won back a portion of Wednesday’s losses by rising $4, or 0.5%, to $751.80 an ounce. July platinum PLN3 +0.58% rose $8, or 0.6%, to $1,461 an ounce.
