NY gold settles at 1-week high on short covering
Wednesday, July 20, 2005 6:39:20 PM
reuters.com
NEW YORK, July 20 (Reuters) - U.S. gold futures closed at a one-week high Wednesday on trade and speculative buying, as the dollar fell against the euro, despite a pledge by Federal Reserve chief Alan Greenspan of further U.S. interest rate hikes, dealers said.
August delivery gold <GCQ5> rose $1.90 to $422.10 an ounce on the New York Mercantile Exchange's COMEX division, its highest settlement since July 13, after trading from $420 to $423.30.
Trade buying boosted gold in the morning before fund and broker short covering emerged later as the euro was bid back above $1.21 vs. the dollar, even as the greenback was rallying against other major currencies like the Japanese yen and Swiss franc.
Gold has had a close inverse correlation with the dollar in recent years as some investors turn to the metal as a dollar alternative.
Greenspan said that U.S. economic growth outlook was solid and the Fed would keep raising rates, but he warned about "significant uncertainties" such as high energy prices and "speculative fervor" in some U.S. housing markets.
Higher rates will probably attract more investment in the dollar and "work against gold in the coming months," said TheBullionDesk.com analyst James Moore in a market note.
"However, with oil prices still high and the geopolitical base very unstable, certain investors will still be drawn toward gold's "safe-haven" allure," he added.
Spot gold <XAU=> last was quoted at $422.10/422.80 an ounce, above Tuesday's New York close at $419.50/0.20. Wednesday's afternoon fix in London was at $422.15.
The euro <EUR=> climbed to $1.2137 after gold's close.
Scott Meyers, senior analyst at Pioneer Futures, said gold, and silver too, looked technically constructive on the charts.
Meyers put key resistance in August gold at $428. Support lurks down at $418.20 and $415.80, analysts said.
Estimated COMEX gold volume was 62,000 contracts, compared with Tuesday's official 56,787-lot count.
Open interest rose 2,219 lots to 270,001 lots on Tuesday on apparent new short positions when August gold fell 80 cents.
Silver got a boost from copper futures at record highs nearing $1.60 a lb and from stronger gold and the euro, but the gray metal needs to close above $7.18 an ounce resistance to begin to rally again, Meyers said.
COMEX September silver <SIU5> ended 8.3 cents higher at $7.068 an ounce, after trading from $6.975 to $7.11.
Spot silver <XAG=> hit $7.02/05 an ounce, up from $6.94/97 previously. It fixed at $6.965.
On the board at NYMEX, October platinum <PLV5> rose $4.80 to $875 an ounce. Spot <XPT=> traded at $872/875.
September palladium <PAU5> , which hit a fresh one-month high of $192.90 on Wednesday, closed $3.90 firmer at $192.75 an ounce. Spot <XPD=> edged to $189/192. |
