Monday, August 23, 2010

US gold eases on stronger dollar


Forex Special


New York, 20 August 2010 - US gold futures fell under pressure from a stronger dollar on Friday but still managed to post a gain for the week.

December gold closed at $1,228.80 per ounce, down $6.60 or 0.5 percent from Thursday’s closing price of $1,235.40 on the Comex division of the New York Mercantile Exchange (Nymex). Prices sank as low $1,223.60 and also ranged as high as $1,235.60 during the session.

Gold prices gained $12.20 or 1 percent over the course of the week, up from last Friday’s closing price of $1,216.60.

"Gold pared losses as the day wore on, down $6 after being down over $10," said trader George Gero at RBC Global Futures. 

"Stop loss areas were not reached, but open interest kept improving. The summer doldrums are more responsible for light trading now," he added.

A stronger dollar undermined gold prices today in the absence of major economic data. The greenback went up to 1.2662 against the euro, the highest level since July 13, before easing to around 1.2711 in the afternoon.

Traders also sold gold right before the weekend, faced with mounting doubts about the economy, Gero said.

"Goldman Sachs is telling wealthy clients to ease up on gold, after looking for $1,300 in another area a few days ago, so indecision and uncertainty prevail," he said.

Uncertainty was also seen on Wall Street, where the Dow dropped 0.47 percent to close at 10,223. The Dow declined 0.87 percent during the week, weighed down by poor US jobs, manufacturing and leading indicator figures.

Next week, data for US existing home sales in July comes out on Tuesday and preliminary second-quarter US GDP numbers come out on Friday.

Other precious metals also faltered on Friday. September silver dropped 33.6 cents or 1.8 percent to close at $17.991 per ounce in a day that saw prices range from $17.845 to $18.34 on the Comex.

October platinum fell $13.60 to close at $1,513.90 per ounce and September palladium sank $9.45 to close at $476.20 per ounce on the Nymex.

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