Daily Gold Update

Source: CBS.Marketwatch

San Francisco— Gold futures climbed back to end above $421 an ounce Friday, but prices for the precious metal marked a loss for the week after falling by nearly $7 over the previous two sessions.

Gold for August delivery rose $1.10 to close at $421.30 an ounce on the New York Mercantile Exchange, rebounding from an intraday low of $418.20. The benchmark contract ended $2.50, or 0.6%, below last Friday's close of $423.80 an ounce.

"Relatively solid" economic data have provided some support for the dollar this week and correspondingly "put severe pressure on gold," said editor Brien Lundin in a recent Gold Newsletter.

The "greenback was already riding high off" Wednesday's U.S. trade-deficit data for May, which came in at a lower-than-expected $55.3 billion, he said. Then the Labor Department's consumer price index report issued Thursday showed zero price inflation for the month of June.

On Friday, the Labor Department reported that U.S. producer prices were unchanged in June despite higher energy prices. Separately, the New York Federal Reserve reported continued manufacturing recovery in New York region in July.

The dollar thus managed to maintain upward momentum against most foreign-exchange rivals to close out the week.

Analysts at Action Economics said that overall, the latest economic data are positive for the dollar. And a stronger dollar normally helps provide investors with confidence to leave the safety of the metals sector in favor of the broader market.

But for the near term, the prospects for gold and metals mining companies still "look good," said Lundin.

"If we haven't bottomed yet, we should only have two or three weeks left of short-term pain before beginning a rally that, typically, lasts through the fall," he said.

"I believe the dollar remains overbought and the euro oversold," he said, adding that the euro should advance to the $1.25 level in the next few weeks, "which would help give gold a leg up in dollar terms."

Elsewhere on the futures market Friday, most metals prices climbed. Silver was the exception, showing some slight weakness.

September copper closed at $1.562 a pound, up 1.5 cents for the session, but this left it nearly unchanged for the week. September palladium added $1.60 to close $183.75 an ounce, down $1.85 on the week, while October platinum closed at $865.50 an ounce, up by 10 cents for the day and by $3.40 on the week.

September silver lost 0.5 cent to close at $6.99 an ounce, the contract's lowest level since July 7. It ended 4 cents below last week's close.

Tracking inventories, copper supplies were down 104 short tons at 14,259 short tons as of late Thursday, according to Nymex. Silver stocks were unchanged at 105.5 million troy ounces and gold inventories stood at 5.69 million troy ounces, up 47,724 troy ounces from the previous session.