Daily Gold Update

Source: MarketWatch

San Francisco— Gold futures closed with a loss of over 1% Thursday after gaining more than $40 an ounce in the past eight sessions.

"Gold was overbought and the first quarter is a seasonally weak period for gold, so no surprise there's profit-taking," said Peter Grandich, editor of the Grandich Letter.

"But this powerful secular bull market in gold has a history of sharp but short corrections so any sustained weakness is not expected," he said.

Gold for February delivery has climbed $40.30 an ounce on the New York Mercantile Exchange since its close at $495.30 on Dec. 21. On Wednesday, it traded at a three-week high on an intraday basis but closed at the highest level in almost 25 years.

The contract finished Thursday at $527.80 an ounce, down $7.80 following a low of $524.

Indeed, "gold has [been] hit with a round of profit-taking as the dollar found some legs and crude is trading soft," said Charles Nedoss, an analyst at Peak Trading Group.

On a technical level, "there is a gap support at $532 to $528 and good underlying [support] at $525," he said.

Despite Thursday's price correction, Matthew Parry, an economist at Moody's Economy.com, said he "remains fairly positive" concerning future gold prices.

"Any resumption in geopolitical uncertainty — the type of which seems to have become worryingly common in today's world — would once again send prices escalating," he said. And "the risk (albeit small) of a dollar decline or heightened inflationary pressures will also keeps the gold price inflated."

"Keep your seat belts buckled. It's going to a wild ride as volatility remains high," Nedoss warned.

Meanwhile, the benchmark contract for copper futures fell back after tapping a record Wednesday on the heels of a strike at the world's biggest copper mine in Chile.

Contract workers at Chile's Codelco reportedly announced a strike Wednesday.

Copper for March delivery closed down 3.7 cents at $2.0605 a pound after reaching a record high in the previous session of $2.11.

In other metals trading, March silver dropped 29.8 cents, or 3.3%, to close at $8.872 an ounce. March palladium declined by $11.65 to end at $266.35 an ounce and April platinum shed $11.60 to close at $991.50 an ounce after climbing to a three-week high on Wednesday above $1,000.

On the supply side, copper inventories were up 612 short tons at 7,426 short tons as of late Wednesday, according to Nymex.

Gold supplies rose 137,427 troy ounces to 6.91 million troy ounces, and silver stocks were unchanged at 120.6 million troy ounces.