Source: Marketwatch
San Francisco— Gold futures rallied Friday, sending the benchmark contract past $670 an ounce for the first time in six months as prices tracked crude-oil futures and headed toward a weekly gain of about 3%.
Other metals futures moved mostly higher as the trading week drew to a close.
"We've been consolidating at these resistance points for a week now and have been searching for a reason to jump past the $660 level for gold [and] $14 level for silver," said Neal Ryan, director of economic research at Blanchard & Co.
"I think it's market investors realizing that there is a confluence of very bullish news all hitting the gold market at the same time, which will provide for a sustained price rally," he said in e-mailed comments.
Gold for April delivery climbed to a six-month high of $673.50 an ounce on the New York Mercantile Exchange and was last up $10.20 at $673 an ounce. The contract stood poised to end the week more than $18 higher after closing out Thursday's session with a $5.50 gain.
The rally was triggered by oil futures, which have provided much of the direction for gold in recent weeks. March crude climbed as high as $60.30 a barrel on Friday to touch its strongest level since Jan. 3.
Oil prices have been "vacillating around the $60 range," trading higher for the week because of the cold weather and a bigger-than-expected supply decline than was priced into the market, said Jason Schenker, an economist at Wachovia Corp.
"The recent theme of volatile Fridays could be the catalyst for gold's breakout," said James Moore, an analyst at TheBullionDesk.com, in a note to clients.
On the currency markets, the U.S. dollar partially reversed prior-session losses, which were triggered by a rise in the euro following comments from the head of the European Central Bank. The ECB on Thursday left rates unchanged but signaled that interest rates in the euro zone will continue to rise this year.
The yen was slightly lower as the Group of Seven meeting of finance ministers kicked off in Germany. The euro was last down 0.3% at $1.30, while the dollar was up 0.3% at 121.54 yen.
Mulling Iran, the IMF and HBC's bad debts
Global political tensions are also providing impetus for gold, which is usually seen as a safe-haven investment.
On Thursday, North Korea began six-way negotiations over its nuclear program, while Iran remained defiant about its own enrichment program, as the nation's supreme leader, Ayatollah Ali Khamenei, warned of reprisals against U.S. interests if Iran comes under military attack.
"Reverberations of yesterday's fiery rhetoric coming from Tehran were also felt in the bullion marketplace as participants remember all too well how the U.S. normally takes to such provocations," said Jon Nadler, an analyst at bullion dealers Kitco.com, in e-mailed comments.
Gold traders and investors may also be focusing on a couple of other news items as background support factors, Nadler said.
On Thursday, HSBC Holdings, the world's third-largest bank and one of the most aggressive players in the U.S. market for low-quality mortgages, sent a chill through the financial world with news that its bad-debt charges will be 20% higher than forecast.
"If the problem worsens, it may be a first, but ugly sign that the U.S. economy, and many of its consumers and borrowers, are in trouble," Nadler said.
In another positive development for gold, International Monetary Fund managing director Rodrigo Rato said Friday that any sale of gold by the IMF would only be part of a wider solution to the institution's revenue woes and should not disrupt the gold market, Nadler said.
"Good news indeed for gold, although it had been factored into prices as of last week, and certainly far more significant than the measly few tons bought by a scattered few central banks lately," Nadler said.
Also on Nymex, March silver was last up 15 cents at $13.92 an ounce, trading up around 4% from a week ago.
April platinum rose $3.20 at $1,201.50 an ounce, up about $40 from last Friday, while March palladium fell by $3 to $338 an ounce, trading around the same level it closed at a week ago. March copper was 7.15 cents higher at $2.522 a pound, poised for a weekly gain of about 4%.
Strong moves in gold miners
On the supply side, gold inventories were unchanged at 7.487 million troy ounces as of late Thursday, according to Nymex data. Silver supplies were unchanged at 114.75 million troy ounces and copper stockpiles were flat at 36,643 short tons.
In equities trading, the Philadelphia Gold and Silver Index was last at 143.84 points and the CBOE Gold Index rose to 149.63 points, with both benchmarks chalking up gains of 1.4%. The Amex Gold Bugs Index added 1.7% to stand at 346.55 points.
Three of the largest gold producers — Newmont Mining, AngloGold Ashanti and Barrick Gold — will repo
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