NY Gold, Silver Give Up Gains Late In Day - DOW JONES NEWSWIRES
Comex gold and silver futures finished slightly mixed Friday after giving up earlier gains on apparent long liquidation, traders and analysts said.
The metals were boosted for most of the session by a sharply weaker U.S. dollar and higher crude oil, before profit-taking set in ahead of the close, traders said.
One suggested there may have been some disappointment that the metals had not fared even better when the moves in so many other markets were bullish for gold.
August gold settled up 50 cents to $650.90 an ounce on the Comex division of the New York Mercantile Exchange.
Around the time pit trade was closing, the August contract at the Chicago Board of Trade was up $1.50 to $651.90.
Comex September silver fell 3.2 cents to $12.473. Shortly after it closed, CBOT September silver was down 5.8 cents to $12.44.
Comex August gold had risen as high as $655, its strongest level since Monday, and September silver to $12.675, its strongest level since Tuesday. But then came the late-day declines.
A floor trader commented after the close that the metals simply drifted lower on a generally slow trading day.
"There was probably some profit-taking," he said, but adding that no technical damage occurred, as no sell stops were hit.
Jon Nadler, analyst with Kitco Bullion Dealers, commented that some pre-holiday book squaring set in ahead of the Fourth of July in the U.S. next week.
Leonard Kaplan, president of Prospector Asset Management, said he was "amazed" that gold hadn't rallied more strongly considering the moves elsewhere. Others may have also developed the opinion and said "I just want out," he continued.
"When markets don't respond to good news, it's not a good sign," Kaplan said. He later added, "I think people got discouraged because it wasn't doing all that well. Here you have the dollar getting killed, the oil up a buck and bonds are up big. It didn't make any sense."
Dollar weakness and crude-oil strength tend to boost the metals, and both of those occurred on Friday. As gold was closing, August crude oil was up $1.05 to $70.62 a barrel, and the euro had risen to $1.3530 from $1.34350 late Thursday.
Otherwise, gold initially showed signs of stabilizing after the August futures bottomed at a 5 1/2-month low of $641.10 earlier in the week, said Ralph Preston, senior market analyst with Heritage West Financial.
"The dollar really took a shellacking this morning," he said about the most recent impetus. "We sold off in the dollar, and that played into the metals bull camp."
"Gold prices are still very much the function of U.S. dollar, where the inverse correlation remains very strong," said Gary DeDuke, fund manager with Corsair Trading. "And despite the solid manufacturing Chicago PMI data, robust construction, and recovering consumer sentiment in the U.S. reported this morning, the dollar has been under pressure just as gold prices rebound above the $650 level."
The dollar came into the session weaker, then didn't get any help when a portion of the personal income and spending report showed that the annual personal consumption expenditures price index - excluding food and energy - was up 1.9% last month, falling below the Fed's 2% "comfort zone," DeDuke said.
Also, he said, the dollar's sell-off began overnight when concerns rose that China's central bank may diversify some of its U.S. Treasury holdings in favor of its own special bond offering. Another currency analyst suggested the dollar's overnight weakness may have been tied to a reassessment of the Federal Reserve's late-Thursday statement, with some thinking it may have been softer on inflation than initially thought.
"Support (for gold) at $640 is likely to be preserved into next week, particularly as dollar downside bias is reinforced by central bank meetings in the U.K. and the euro zone," DeDuke said.
Meanwhile, October platinum inched up 50 cents to $1,286.50 an ounce, while September palladium dipped $2 to $368.50 an ounce. These metals tended to be near steady even when gold was stronger.
A softer dollar normally might also support these metals, but on this day the platinum group metals were largely sidelined as they continued to monitor the labor situation in South Africa, said one trader. Contract offers between Anglo Platinum and a union representing workers has narrowed, he explained. This comes after Impala Platinum and union representatives recently had also narrowed their difference.
"We're in a wait-and-see period," said the trader. "We got some encouraging news from South Africa."
Earlier in the month when the parties were farther apart, the potential for a labor disruption had supported platinum.
Settlements (includes open-outcry and electronic trading): London PM Gold Fix: $650.50 versus $647.25 Thursday Spot gold at 1:31 p.m. ET: $649.85, up $1.10 from previous day; Range: $646.55-$652.55 August gold (GCQ07) $650.90, up 50 cents; Range $648.80-$655 September silver (SIU07) $12.473, down 3.2 cents; Range $12.355-$12.675 October platinum (PLV07) $1,286.50, up 50 cents; Range $1,282-$1,291 September palladium (PAU07) $368.50, down $2; Range $366-$369.20
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