Daily Gold Update

Source: Marketwatch

New York— Gold futures closed marginally higher Wednesday, as the dollar recouped some of its prior-session losses and crude-oil futures traded flat on conflicting supply data.

Gold for June delivery ended up 20 cents at $681.70 an ounce on the New York Mercantile Exchange.

"Bullion closed Wednesday's session on a markedly less enthusiastic note," said Jon Nadler, analyst at Kitco Bullion Dealers.

"The gold rally shows some signs of fatigue and now has to contend with a rebounding US dollar and a renewed anti-inflation stance from the IMF as well as the Fed."

James Moore, metals analyst at TheBullionDesk.com, said that technical indicators and market fundamentals are suggesting further gains for gold.

Other metals prices were mixed. May silver fell 4 cents to $13.89 an ounce. July platinum closed up $7.70 at $1,281.30 an ounce, June palladium rose $6.10 at $369.55 an ounce and May copper ended up 5.65 cents at $3.5825 a pound.

On Tuesday, gold futures rose $4.60, or 0.7%, at $681.50 an ounce, boosted by trade tensions between the U.S. and China and a slide in the U.S. dollar.

"[There are] some reports of profit-taking ahead of the G-7 meeting later this week, but traders still see a bullish trend as lingering geo-political tensions and inflation pressures are likely to attract bargain hunters and support gold prices," said analysts at Action Economics.

The dollar edged up against the euro and yen Wednesday, stabilizing after a sharp decline in the previous session. Traders focused on the minutes from the March 20-21 meeting released Wednesday after the gold market had closed.

U.S. Federal Reserve members were very uncertain about the economic outlook and changed their policy statement to gain more flexibility to respond to the incoming data, the minutes said.

"The FOMC agreed that further policy firming might prove necessary to foster lower inflation, but in light of increased uncertainty about the outlook for both growth and inflation, the FOMC also agreed that the statement should no longer cite only the possibility of further firming," the FOMC minutes said.

"Instead the statement should indicate that future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information," the minutes said.

Elsewhere on the commodity markets, reformulated gasoline futures rallied Wednesday to an eight-month high, as a greater-than-expected draw on gasoline stocks helped support the belief that demand will remain strong through the summer driving season. Crude oil for May delivery was up 14 cents at $62.03 a barrel on NYMEX, but had been up as much as 67 cents at its intraday high of $62.56.

On the supply side, gold warehouse stocks rose 153,192 troy ounces to stand at 7.45 million troy ounces as of late Tuesday, according to New York Mercantile Exchange data. Silver supplies rose 1,023 troy ounces to stand at 126.4 million troy ounces, while copper supplies were unchanged at 36,355 short tons.

In equities, shares of Alcoa Inc. climbed Wednesday, a day after the aluminum producer reported surprising strength in first quarter profit thanks to higher metals prices and demand from aerospace and global construction markets.

Indexes tracking the performance of stocks in the metals and mining sector fell Wednesday. The Amex Gold Bugs Index fell 1% at 354.40 points, the CBOE Gold Index fell 0.8% at 149.96 points and the Philadelphia Gold and Silver Index was down 0.6% at 143.36 points.

As for sector exchange-traded funds, the StreetTracks Gold Trust ETF fell 0.1% at $67.10, the iShares Silver Trust ETF fell 0.4% at $137.86 and the Market Vectors-Gold Miners ETF declined 0.7% at $41.10.