Gold steadies after tough week

New York (Mar 29)  Gold steadied on Friday after the heavy losses of the past few days, though traders said the mood remained nervy after a string of solid US economic releases.

Spot gold was US$4 higher at US$1,294, but was still heading for a second week of losses.

Comments from new Federal Reserve chairman Janet Yellen that US interest rates may rise six months earlier than the market had anticipated continued to weigh heavily on the metal said traders.

The US dollar, which traditionally moves in the opposite direction of gold price, has picked up strongly since the comments and was further boosted this week as US jobless claims fell to a three-month low while last quarter’s US GDP was nudged higher on revision.

Evy Hambro, the manager of Blackrock’s World Mining Trust, told Bloomberg that he expected the price to remain around the recent range. 

At US$1,300 the price is where it was before quantitative easing started and the QE premium has now disappeared, he said, adding the price will be capped to at the lower end by the operating costs of the miners at around US$1150- 1200 and by the strength of the US dollar at the top.

Among the other metals, silver was a few cents higher at US$19.79, while platinum was US$5 higher.

Source: ProactiveInvestors