LONDON (MarketWatch) — Gold prices slipped Monday, easing from a gain last week that marked the precious metal’s best weekly performance in more than a year.
Gold for February delivery GCG5, +1.06% shed $2, or 0.2%, to $1,274.90 an ounce in electronic trading. Floor trading at the CME was closed Monday for the Martin Luther King, Jr. holiday.
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Gold prices on Friday finished at their highest level since Sept. 5. Last week, gold futures jumped 5%, the strongest rise since the week ended July 12, 2013, according to FactSet data. The rise was aided in part by safe-haven bids, as financial markets were roiled late last week by the Swiss National Bank’s decision to abandon its currency cap against the euro EURCHF, +1.76%
Gold’s safe-haven appeal and the prospect for higher prices are coming into sharper focus against a background of weaker equity markets, lower yields and the possibility of further stimulus measures from the European Central Bank, among other factors, said analysts at Barclays in a note Monday.
“But the key question is whether gains can be sustained”, as gold has previously been in a position to benefit from “a plethora of catalysts” but gave only a lackluster performance, to the dismay of many investors, wrote Barclays commodities analysts led by Suki Cooper.
“Investor positioning may be lighter than it was two years ago, but we believe the rally is likely to lose steam without a change in sentiment and wider investor support,” the Barclays analysts said. “Given that tactical investors are not positioned for a rate hike, opportunities to short gold are building.”
In other developments Monday, Germany’s Bundesbank said it’s continued to step up repatriation of its gold reserves from overseas. It said in a statement that in 2014, it brought back 120 tonnes (about 132 short tons) of gold to Frankfurt, with 85 tonnes from New York and 35 tonnes from Paris. The Bundesbank began the repatriation program in 2013 with the aim of storing half of Germany’s gold reserves in its vaults by 2020.
Elsewhere in the metals complex, high-grade copper for March delivery HGH5, +0.66% fell 4 cents, or 1.5%, to $2.58 a pound.
March palladium PAH5, -0.44% rose $12.25, or 1.6%, to $766.55 an ounce, while April platinum PLJ5, +0.00% fell $5.60, or 0.4%, to $1,263.8 an ounce.
