Gold price bounces off 11-week low
London (Jun 8) Gold futures posted small gains Monday, finding support after finishing last week at an 11-week low.
Gold for August delivery on Comex GCQ5, +0.26% gained $3.30, or 0.3%, to $1,171.40 an ounce, while July silver SIN5, -0.12% lost 1.4 cents, or 0.1%, to $15.97 an ounce.
Gold on Friday ended at its lowest level since March 18 after a stronger-than-expected jump in U.S. nonfarm payrolls in May reinforced expectations that the Federal Reserve will raise interest rates in September, wrote Peter Hug, global trading director at Kitco Metals.
Talks aimed at resolving Greece’s debt standoff with its international creditors continue to drag on. Greek Prime Minister Alexis Tsipras is expected to meet with German Chancellor Angela Merkel and French President François Hollande in Brussels on Wednesday.
“The Greek saga looks like it will be deferred, but remains in the background, with the metals taking their cue from the U.S. dollar exchange rate and equity values today,” Hug said, with $1,165 to $1,178 likely to “define the range.”
The dollar was weaker versus most major rivals after scoring a 13-year high versus the yen on Friday. The ICE U.S. dollar index DXY, -0.68% a measure of the U.S. currency against a basket of six major rivals, fell 0.4% to 95.916. A weaker dollar is seen as supportive for commodities priced in the unit as it makes them less expensive to users of other currencies.
Meanwhile, continued price weakness across precious metals raises questions about whether physical demand is responding to lower prices, wrote analysts at Barclays, in a note.
“Buying in China has certainly responded to lower silver and platinum prices, with the appetite for platinum increasing most rapidly. Buying in gold has weakened, unsurprisingly as we enter a seasonally slow period for demand,” they wrote.
The analysts said they continue to see $1,100 an ounce as a “vulnerable level” for gold producers.
In other metals trade, July platinum PLN5, +0.59% rose $6.10, or 0.6%, to $1,098.10 an ounce, while September palladium PAU5, -0.39% lost $3.15, or 0.4%, to $747.80 an ounce.
July copper HGN5, +0.28% rose 0.25 cent, or 0.1%, to $2.695 a pound.
Source: MarketWatch
