Gold gains as European concerns ease
By Claudia Assis and Laura Mandaro
SAN FRANCISCO (MarketWatch) — Gold futures edged higher Thursday following a round of U.S. economic data, with a reprieve in concerns over Europe’s banking and sovereign-debt outlook providing a floor for the metal.
Gold for June delivery GCM2 -0.02% advanced $3.20, or 0.2%, to $1,597 an ounce on the Comex division of the New York Mercantile Exchange.
Traders keyed off U.S. government data that showed initial jobless claims stayed relatively flat last week as import prices dipped in April and the U.S. trade deficit surged in March.
The dollar slipped Thursday, helping gold to stabilize after closing below $1,600 an ounce for the first time this year in the previous session.
Dollar-denominated commodities — particularly gold, which is seen as an alternate to paper currencies — often take a knock as the dollar rises.
On Thursday, European stocks and the euro rose after Spain moved to nationalize struggling real-estate lender Bankia and European leaders agreed to grant the next aid payment to Greece. Read more about European stocks.
The Stoxx Europe 600 XX:SXXP +0.41% was up 0.6% at 251.23, pivoting away from early losses.
The dollar fell against the euro, with one euro buying $1.2971 compared with $1.2954 late Wednesday. Read more about currencies.
Despite its recent downturn, gold is not losing its luster “as the currency of last resort,” analysts at Goldman Sachs said in a report released Thursday.
“Improved confidence” in the dollar in recent months has made the U.S. currency the flight-to-safety asset at the moment, they said.
“However, we believe it is too early for the U.S. dollar to reclaim this status, as the original U.S. dollar concerns have not disappeared,” the analysts added. They left their 6-month forecast for gold prices unchanged at $1,840 an ounce.
Meanwhile, most metals futures traded higher. Silver for July delivery SIN2 -0.16% rose 11 cents, or 0.4%, to $29.34 an ounce. The Shanghai Futures Exchange on Thursday launched a new silver futures contract, according to analyst and news reports.
“This can be seen as complementing the existing contract on the Shanghai Gold Exchange and is aimed more at institutional investors and producers. …. [The] new contract could lead to generally higher demand for silver and lend support to the price,” analysts at Commerzbank said in a note to clients.
July copper HGN2 +0.49% gained 3 cents, or 0.9%, to $3.69 a pound.
A Chinese auto maker trade group reported higher-than-expected passenger car sales in April, climbing up 12.5% on year to 1.28 million units.
The report confirmed the trade group’s forecast that vehicle sales will grow 8% this year, the Commerzbank analysts said, “which could lend support to the precious metals platinum and palladium, both of which have come under severe pressure recently.”
Platinum for July delivery PLN2 -0.56% declined $3.30, or 0.2%, to $1,495.80 an ounce. Palladium for June PAM2 +0.33% rose $4.85, or 0.8%, to $618.50 an ounce.