Daily Gold Update

Source: MarketWatch

San Francisco— Gold futures fell Friday afternoon after reaching a fresh quarter-century high a day earlier, but prices were still trading over 2% above the week-ago close.

"Recent strength in the dollar is making some would-be buyers a little nervous," Nell Sloane, analyst at NSFutures.com, said in daily commentary.

Gold for April delivery was last trading down $4.20 at $572.60 an ounce on the New York Mercantile Exchange. On Thursday, the contract climbed to a high of $579.50 an ounce, before easing back to close at $576.80, levels not seen since January 1981.

The contract closed out last Friday at $558.80, so prices are still around $13-an-ounce higher for the week so far.

March silver was last trading down 14.2 cents at $9.735 an ounce. It's around 1.5% above last week's close.

April platinum was down $6.30 at $1,083 an ounce after touching a record $1,091 on Thursday. Prices were set to end the week with a $10 gain. Its sister metal, palladium, saw its March contract climb $9.15 in the latest dealings to stand at $318 an ounce after a $322.50 high, levels not seen since April 2004. A week ago, the contract closed at $278.

Rounding out the metals action, March copper was down 0.3 cent at $2.306 a pound after the previous session's all-time high near $2.32. It's trading a few cents above last Friday's close.

Economists at Action Economics said gold had consolidated around $572 overnight but found support from a wave of buying by investment funds in Tokyo.

"The [precious-metals] complex remains generally very well bid, with [the Tokyo Commodities Exchange] platinum futures contract, for instance, logging a fresh record high today," said the research firm.

On the supply side, inventories of copper were unchanged at 11,654 short tons as of late Thursday, according to the New York Mercantile Exchange. Gold stocks rose 50,526 troy ounces to 7.318 million and silver supplies rose 600,924 troy ounces to 125.4 million.

Watching Iran

In recent sessions, gold has found support from political developments worldwide, notably the tensions building between western governments and Iran over its recently resumed nuclear-research program.

On Friday, Iran warned that it wouldn't consider moving its uranium enrichment program to Russia if it was referred to the U.N. Security Council, according to the Associated Press.

The International Atomic Energy Agency had been expected to report Iran to the Security Council, but hold back until a meeting March on any action that might lead to sanctions against the Middle Eastern country, according to BBC News. The Friday meeting was adjourned to Saturday, the AP said.

On Thursday, IAEA head Mohamed El-Baradei said the situation was not yet a crisis.

"Gold proved to be the perfect insurance in a portfolio over the last few years and most portfolio managers believe that gold is an asset which should not be missed in their portfolios," said Frederick Panizzutti, an analyst at MKS Finance in Geneva.

The real risk of a renewed oil shock, the Iranian nuclear talks, the risk of a "timely economic destabilization triggered by renewed terrorist actions" are more than sufficient reasons to "keep part of one's assets in a safe and very concrete investment — immune from all possible disruptions," he said.