Source: Marketwatch
San Francisco— Gold futures fell Friday but are on track to end the week with a gain of more than $30 an ounce.
After climbing more than 6% over the past three sessions, gold for June delivery pulled back to $717 an ounce on the New York Mercantile Exchange, down $4 following an intraday $728 high. The contract moved as high as $732 an ounce in electronic trading — the highest futures level since September 1980.
The contract has rallied sharply this week, fueled by fund buying that's pushed it up from last week's close of $684.30.
"Tireless as a Tour de France cyclist, the gold market has now appreciated better than 70% over the past year for a $300 dollar gain," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com.
"To say that gold is climbing a wall of worry is to understate the situation quite a bit — this is starting to look more like a wall of panic," he said. "But, like the cyclists, gold must also rest occasionally."
The dollar was mixed Friday, gaining ground against Japan's yen and paring losses against the euro following a report that showed the U.S. trade deficit narrowing in March.
The Federal Reserve's statement Wednesday may have deflated the equity market, but it hasn't braked the momentum in metals, observed Edward Meir, analyst at Man Financial.
"At this point, rising interest rates in the U.S. do not seem to be denting economic growth much," he said. "We think the weakness could become more apparent early next year, when rising interest rates begin to have more bite. But for now, there is no noticeable slowdown in growth, allowing the commodity bulls more or less free rein."
Summing it up
Overall, "gold's recent rally mirrors the sum total of the current set of tumultuous conditions originating in Washington," said Nadler, including Thursday's broad U.S. domestic telephone data-gathering revelations.
"Even if we finally undergo the long-awaited (9 weeks now) correction in gold prices, the above mentioned conditions will persist and continue to bolster the case for diversifying out of paper for the sake of safety," he said.
With gold prices approaching $750, Dale Doelling, chief market technician at Trends In Commodities said he doesn't see any "topping formations."
"Not only do I believe that we're not at a major top, but I think this bull market may just be building a full head of steam," he said, adding: "I will be very surprised if gold doesn't break the $1,000 barrier before summer turns to fall."
Elsewhere in metals, July platinum was last trading up $20.90 at $1,316.50 an ounce, extending Thursday's strength to touch a record at $1,340. June palladium lost $4 at $396 an ounce, after trading at a four-year high of $409.
July copper eased back 7.3 cents to $3.85 a pound, reversing after rising to a record above $4 in Thursday's session, and July silver dropped 58.5 cents to stand at $14.35 an ounce after reaching a 25-year high of $15.20 on Thursday.
On the supply side, gold inventories were unchanged at 7.67 million troy ounces as of late Thursday, according to Nymex data. Silver supplies were down 34,208 troy ounces at 123.5 million. Copper supplies fell 338 short tons to 13,912 short tons.
Indexes weaken
After tapping never-before-seen levels on Thursday, the benchmarks that track stocks in the metals-mining sector headed lower to close out the week.
The Philadelphia Gold and Silver Index was down 4.4% at 158.77 and the CBOE Gold Index retreated to 160.96, down 4.7% — this after touching a lofty 175.05.
The Amex Gold Bugs Index stood at 368.03, losing 5%.
Among individual standouts, shares of Randgold Resources fell 8.7% to $22.50 and Hecla Mining lost 7.4% to trade at $5.60.
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