Source: MarketWatch
San Francisco— Gold futures fell Thursday, but prices closed well above the session's worst level as investor interest in silver climbed, lifting prices for the metal to 1987 levels.
"Despite the continuing consolidation, there are few gold sellers," said Julian Phillips, an analyst at GoldForecaster.com. "Any pullback is already bringing buyers."
Gold for February delivery fell to a low of $554.40 an ounce on the New York Mercantile Exchange. It recovered most of its decline to close at $559.90, down $2.60. Prices climbed $4.40 to close at $562.50 on Wednesday, failing to reach Friday's 25-year high of $568.50.
Analysts remained upbeat about the metal's overall outlook despite gold's occasion pull backs.
"With generally favorable world equity market action over the last several sessions, and a lot of talk about new commodity funds getting involved in the metals, we have to think that the trend in gold will continue to point to the upside," Nell Sloane, an analyst at NSFutures.com said in daily commentary.
In the near term, she sees the $566 level as a "critical pivot point, with close-in resistance seen at $570."
Meanwhile, inventories of copper were unchanged at 9,180 short tons as of late Wednesday, according to Nymex. Gold inventories were up 48,341 troy ounces at 7.17 million. Silver supplies were at 123.4 million troy ounces, up 592,720 troy ounces.
Silver rallies
Copper and palladium prices on the exchange pulled back along with gold after Wednesday's broad market strength, but silver managed to reach another 18-year high.
March copper shed 0.2 cent to close at $2.2015 a pound. It touched a record of $2.206 earlier.
April platinum traded at $1,064 an ounce, down 80 cents, after reaching a 26-year high of $1,068 on Wednesday. Sister metal palladium saw its March contract fall by $7.65 to $276.25 an ounce.
"With clear skies above on the charts as well as positive fundamentals and strong investment demand, [platinum] has plenty of scope for further gains in the coming sessions," said James Moore, an analyst at TheBullionDesk.com in London.
March silver made the biggest move higher, up 9.5 cents to finish at $9.605 an ounce, adding to Wednesday's over 3% climb. Prices haven't traded at levels this high since mid-1987.
"Positive comments about the pending launch of Barclays' ETF triggered heavy dealer and fund buying" on Wednesday, said Moore in a note to clients.
The planned exchange-traded fund investing in silver from Barclays Global Investors moved closer to gaining regulatory approval, according to media reports Wednesday. A BGI spokeswoman reportedly said that while the silver ETF hasn't been cleared by the Securities and Exchange Commission, "some movement" has occurred.
"Silver is taking center stage…with the news of Barclays' silver ETF a step closer to possible approval," said Peter Spina, an analyst at GoldForecaster.com.
"We have some gold investors moving into the silver market," he said, adding that he expects silver to target $9.80-10 an ounce in the short term.
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