Gold Up on Safe-Haven Buying, Dollar Weakness
MarketWatch
Gold futures inched higher Friday, leaving behind early-session losses as a lower dollar and safe-haven buying ahead of the weekend supported prices.
The early price weakness was met with buying interest that quickly pushed prices higher, a good sign for gold’s short-term gain prospects, analysts said.
Gold for February delivery rose $6, or 0.4%, to $1,732.70 an ounce on the Comex division of the New York Mercantile Exchange after tapping a low of $1,714.20 earlier.
A close in the black would be gold’s third straight session of gains.
Gold surged more than 3.6% in the past two days, and on Thursday settled at its highest in seven weeks.
The metal has enjoyed strong recent gains spurred by the Federal Reserve’s projection of ultra-low interest rates through 2014.
Gold prices have risen nearly 10% so far this month.
“Gold looks great in the charts and a lot of people are taking it as a sign to buy gold,” said Adam Klopfenstein, a market strategist with Archer Financial Services in Chicago.
Ahead of the weekend and potential for headlines out of Greece and the euro zone, some are also adding gold to their portfolio as a safe haven, he added. A lower dollar also helped push prices higher, Klopfenstein said.
The Wednesday Fed decision “awakened the positive gold sentiment” that had been underneath the surface but cloaked in caution after the selloff in fourth quarter, said Jeffrey Wright, a senior research analyst with Global Hunter Securities.
“Inflation is in the market; (it is ) just being under-reported in my opinion,” he said. In addition, the “miss” on fourth-quarter gross domestic product will give the Fed an “additional cover” to continue its “easing” stance and will also contribute to gold going higher, he added in emailed comments.
Earlier Friday, investors parsed out news U.S. GDP expanded 2.8% in the fourth quarter, compared to expectations of a rise around 3%.
Other metals more linked to industrial uses, and therefore more sensitive to the GDP news, felt the pressure on Friday, but silver turned higher.
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