Gold above $670Gold futures close at a six-month high above $670
Gold futures rallied Friday, sending the benchmark contract past $670 an ounce to close at its highest level in six months with prices tracking strength in crude-oil futures and scoring a weekly gain of more than 3%.
"We've been consolidating at these resistance points for a week now and have been searching for a reason to jump past the $660 level for gold [and] $14 level for silver," said Neal Ryan, director of economic research at Blanchard & Co.
"I think it's market investors realizing that there is a confluence of very bullish news all hitting the gold market at the same time, which will provide for a sustained price rally," he said in e-mailed comments.
Gold for April delivery closed at $672.30 an ounce on the New York Mercantile Exchange, its strongest closing level since Aug. 9. It ended $9.50 higher for the session, up $20.80, or 3.2%, for the week.
Oil futures have provided much of the direction for gold in recent weeks. March crude climbed as high as $60.80 a barrel on Friday to touch its highest level since Jan. 3. It closed at $59.89, up 18 cents for the day, and up 1.5% for the week.
Oil prices have been "vacillating around the $60 range," trading higher for the week because of the cold weather and a bigger-than-expected supply decline than was priced into the market, said Jason Schenker, an economist at Wachovia Corp.
On the currency markets, the dollar rose modestly against other major currencies Friday, with Japan's yen coming under slight pressure as a meeting of Group of Seven finance ministers kicked off in Germany.
Mulling Iran, the IMF and HBC's bad debts
Global political tensions are also providing impetus for gold, which is usually seen as a safe-haven investment.
On Thursday, North Korea began six-way negotiations over its nuclear program, while Iran remained defiant about its own enrichment program, as the nation's supreme leader, Ayatollah Ali Khamenei, warned of reprisals against U.S. interests if Iran comes under military attack.
"Reverberations of yesterday's fiery rhetoric coming from Tehran were also felt in the bullion marketplace as participants remember all too well how the U.S. normally takes to such provocations," said Jon Nadler, an analyst at bullion dealers Kitco.com, in e-mailed comments.
Gold traders and investors may also be focusing on a couple of other news items as background support factors, Nadler said.
On Thursday, HSBC Holdings, the world's third-largest bank and one of the most aggressive players in the U.S. market for low-quality mortgages, sent a chill through the financial world with news that its bad-debt charges will be 20% higher than forecast.
"If the problem worsens, it may be a first, but ugly sign that the U.S. economy, and many of its consumers and borrowers, are in trouble," Nadler said.
In another positive development for gold, International Monetary Fund managing director Rodrigo Rato said Friday that any sale of gold by the IMF would only be part of a wider solution to the institution's revenue woes and should not disrupt the gold market, Nadler said.
"Good news indeed for gold, although it had been factored into prices as of last week, and certainly far more significant than the measly few tons bought by a scattered few central banks lately," Nadler said.
Also on Nymex, March silver closed up 14.5 cents at $13.915 an ounce, up 4% from a week ago.
April platinum rose $3.50 to close at $1,201.80 an ounce, up $38.30 from last Friday, while March palladium added 65 cents to end at $341.65 an ounce, up 1% from a week ago. March copper closed 6.7 cents higher at $2.5175 a pound, logging a weekly gain of 3.9%.
On the supply side, gold inventories were unchanged at 7.487 million troy ounces as of late Thursday, according to Nymex data. Silver supplies were unchanged at 114.75 million troy ounces and copper stockpiles were flat at 36,643 short tons.
◄ Back Back to top ▲