Gold rallies; closes with minor weekly loss
Prices up for first time in four days; copper futures steady
"Perceived negatives have no lasting affects and are eventually overcome to the upside -- leaving bears wondering what will it take to keep gold down," he said.
By Myra P. Saefong, MarketWatch
Last Update: 4:17 PM ET Oct. 21, 2005
SAN FRANCISCO (MarketWatch) -- Gold futures climbed almost $6 an ounce Friday, but still ended the week with a minor loss on the heels of a three-session losing streak that yielded a decline of more than $13 an ounce.
NEWS FOR $GOX
Gold futures rise $6, still log a small weekly loss
Gold ends at 5-week low, tallies 3-day loss of over $13
Gold futures end at 5-week low as oil prices drop
"In true secular bull market fashion, gold has once again gone through a sharp and short correction in its 'two steps up, one step back' climb to $500," said Peter Grandich, editor of the Grandich Letter.
"Perceived negatives have no lasting affects and are eventually overcome to the upside -- leaving bears wondering what will it take to keep gold down," he said.
Indeed, gold prices climbed Friday despite strength in the dollar, which usually eases investment interest in the yellow metal. See Currencies.
Gold for December delivery closed at $469.10 an ounce on the New York Mercantile Exchange, up $5.90, or 1.3%, for the session. But the contract lost $13.40 over the past three sessions so it closed 0.6%, or $2.70, below the week-ago close of $471.80.
Sudden move
Earlier Friday, gold prices had only been making modest gains. It logged the bulk of its climb for the session in the last hour of trading.
"This looks 100% technical in nature," said Tim Evans, a senior analyst at IFR Markets. "It just looks like [gold] found technical support at Thursday's $462 low ahead of the 461.20 low from September 27 and now we're seeing an upward reversal off that support."
From here, the market will likely "chop sideways now in the same range as the last half of September, then break through the $461.20 level and keep on going," he said. "The market is still top heavy with quite a bit of speculative length."
Overall, however, the "general sentiment is that the market sold off to far too fast and that too many uncertainties [are] looming right now," said commodities trader Kevin Kerr. Kerr also edits the Global Resources Trader investment letter, a service of MarketWatch, the publisher of this report.
"Gold is a lion and it's roaring higher -- these dips have to be seen as buying opportunities," he said.
'Underlying strength'
Richard Au, a managing partner at Brick Capital Partners believes the "underlying strength of gold over the last 12-24 months ... has been a consistent factor of strong underlying physical offtake."
The week has "been marked by a very powerful downdraft in mining shares and the metal, and resource shares in general; accordingly there may be some 'position squaring' in the entire resource sector after this sharp pullback," he said.
Gold had been under pressure this week because "oil prices are backing down relieving inflationary pressures and ... the prospects that the fed will continue to raise interest rates which are aimed at cooling inflationary pressure will also temper consumer spending," said John Person, president of National Futures Advisory Service.
"Overall gold needs to hold the $460 level of support otherwise it could trade back down as low as $445 in the next 30 days," he said.
Copper up, silver down for the week
Elsewhere in the metals market Friday, December copper closed unchanged at $1.793 a pound.
Futures prices for the industrial metal managed to briefly tap a fresh record of $1.858 a pound on Thursday. They finished a few cents above last week's close of $1.7565.
Rounding out the Nymex action, December silver closed higher, up 4 cents at $7.695 an ounce -- down about 2% from last Friday's close of $7.862.
December palladium finished unchanged at $212.05 an ounce, but it's still above last week's close above $210. Sister metal October platinum closed up $7.70 at $932.80 an ounce, above last week's close of $927.30.
Inventories of copper, silver and gold as of late Thursday were unchanged from Wednesday, according to Nymex. Copper inventories stood at 3,690 short tons, silver was at 117.4 troy ounces and gold amounted 6.35 million troy ounces.
Indexes follow gold
Meanwhile, indexes tracking equities in the metals-mining sector continued to mirror moves in gold prices. With gold ending lower for the week, the indexes also finished as much as 3.4% lower from last week.
The CBOE Gold Index ($GOX:
CBOE Gold Index
News, chart, profile
Last: 94.46+2.85+3.11%
FinancialsMore $GOX$GOX94.46, +2.85, +3.1%) closed up by 3.1% at 94.46 points. It lost 2.5% for the week.
The Philadelphia Gold/Silver Index ($XAU:
phlx gold silver index capital-weight
News, chart, profile
Last: 104.93+2.94+2.88%
FinancialsMore $XAU$XAU104.93, +2.94, +2.9%) finished at 104.93, up 2.9% for the day, but down 1.9% for the week. The Amex Gold Bugs Index (HUI: amex gold bugs index equal-$ weight
News, chart, profile
Last: 221.90+5.89+2.73%
Among the winners Friday, shares of Goldcorp (GG:
goldcorp inc new com
News, chart, profile
Last: 18.53+0.92+5.22%
Myra P. Saefong is a reporter for MarketWatch in San Francisco.
