Gold fell from a three-week high Friday as an advance by the U.S. dollar eroded demand for the precious metal as an alternative asset.
The greenback rose for a second straight day against a basket of major currencies as reports showed the U.S. economy is improving and Egyptian President Hosni Mubarak stepped down. Earlier, gold gained as much as 0.5% amid mounting tensions in Egypt.
"Some of the dollar strength is hurting gold," said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. "If gold doesn't rally from here, it's going to trigger a lot of sell signals."
Gold futures for April delivery fell US$2.10, or 0.2%, to settle at US$1,360.40 an ounce. Earlier, the price reached US$1,369.70, the highest for a most-active contract since Jan. 20. This week, the metal climbed 0.8%, the third straight gain, after slumping 6.1% in January. In 2010, the price jumped 30%, the 10th consecutive annual gain.
Silver futures for March delivery declined 9.9¢, or 0.3%, to US$29.995 an ounce. This week, the metal gained 3.2%.
The tightest physical silver supplies in four years have tipped the U.S. silver futures market into backwardation this week, making near-term prices more expensive than more distant months.
Market watchers said that it has been more than 10 years since silver futures were last in backwardation, an unusual term structure associated with shortage of physical supply. Warehouse stocks have dropped to a four-year low on surging demand, while miners have hedged their future production.
Booming industrial demand for silver and record U.S. coin sales, combined with a surge in demand from mining companies to borrow the metal for their hedge programs have led to a squeeze in the physical silver market.
Palladium futures for March delivery fell $6.20, or 0.8%, to $814.70 an ounce on the New York Mercantile Exchange. This week, the price dropped 0.2%.
Platinum futures for April delivery declined $17.30, or 0.9%, to $1,813.50 an ounce. The commodity fell 1.7% this week.
The greenback rose for a second straight day against a basket of major currencies as reports showed the U.S. economy is improving and Egyptian President Hosni Mubarak stepped down. Earlier, gold gained as much as 0.5% amid mounting tensions in Egypt.
"Some of the dollar strength is hurting gold," said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. "If gold doesn't rally from here, it's going to trigger a lot of sell signals."
Gold futures for April delivery fell US$2.10, or 0.2%, to settle at US$1,360.40 an ounce. Earlier, the price reached US$1,369.70, the highest for a most-active contract since Jan. 20. This week, the metal climbed 0.8%, the third straight gain, after slumping 6.1% in January. In 2010, the price jumped 30%, the 10th consecutive annual gain.
Silver futures for March delivery declined 9.9¢, or 0.3%, to US$29.995 an ounce. This week, the metal gained 3.2%.
The tightest physical silver supplies in four years have tipped the U.S. silver futures market into backwardation this week, making near-term prices more expensive than more distant months.
Market watchers said that it has been more than 10 years since silver futures were last in backwardation, an unusual term structure associated with shortage of physical supply. Warehouse stocks have dropped to a four-year low on surging demand, while miners have hedged their future production.
Booming industrial demand for silver and record U.S. coin sales, combined with a surge in demand from mining companies to borrow the metal for their hedge programs have led to a squeeze in the physical silver market.
Palladium futures for March delivery fell $6.20, or 0.8%, to $814.70 an ounce on the New York Mercantile Exchange. This week, the price dropped 0.2%.
Platinum futures for April delivery declined $17.30, or 0.9%, to $1,813.50 an ounce. The commodity fell 1.7% this week.
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