Comex Gold 1648.10 Silver 32.41 Rises After Selloff
Mar 15, 2012 By Matt Day Of DOW JONES NEWSWIRES
--Comex April gold rose 0.2%, or $2.80, to $1,645.70 a troy ounce
--Gold sees cautious buying after three-day slump
--Physical demand "fickle," Barclays says, raising doubts about price support
NEW YORK (Dow Jones)--Gold steadied on Thursday as the market's recent slide drew some opportunistic buying.
Futures had slumped for three consecutive sessions on reduced expectations for potentially gold-boosting Federal Reserve stimulus.
The most actively traded gold contract, for April delivery, was recently up $2.80, or 0.2%, to $1,645.70 a troy ounce on the Comex division of the New York Mercantile Exchange.
Stimulus programs from the central bank can weaken the dollar and boost demand for precious metals as a hedge against currency weakness, and analysts in recent weeks have come to view another round of Fed bond buying as unlikely because of a surprisingly strong U.S. economy.
Gold was hit hard as traders unwound bets made in anticipation of further Fed moves. Gold futures slid for three consecutive sessions, slumping by 4% through Wednesday as investors bet that stimulus from the Federal Reserve wasn't likely in the near term.
The ICE U.S. Dollar Index, which tracks the currency against those of some major U.S. trading partners, on Thursday touched its highest level since mid-January, dragging on dollar-denominated gold by making the futures appear more expensive for buyers using other currencies.
"The mood remains fairly somber amongst the gold bulls this morning," said Steve Scacalossi, director of global precious metals with TD Securities, in a note. "Yesterday's selloff took out some key technical supports in both gold and silver."
Wednesday's declines sent gold to its lowest settlement price in more than eight weeks.
Sharp declines in the price of gold during the last year have led to increased physical demand for the metal, but investors have been cautious to bet on that support this time around.
"Gold has been searching for a floor from the physical market," said Suki Cooper, an analyst with Barclays Capital, in a note. "Such demand has proved to be fickle in recent weeks."
-By Matt Day, Dow Jones Newswires; 212-416-4986; firstname.lastname@example.org
(END) Dow Jones Newswires