The combination of tensions regarding Iran, a weaker U.S. dollar and stronger
crude oil supported gold futures on Monday, analysts said. Silver and platinum
followed.
April gold rose $6.60 to $663.90 an ounce on the Comex division of the New
York Mercantile Exchange. As pit trade was closing, the April contract at the
Chicago Board of Trade also was up $6.60 to $663.90.
Comex May silver rose 18.3 cents to $13.41. As it was closing, CBOT May
silver was up 20.4 cents to $13.415.
Early in the session, several analysts cited stronger crude oil and
international tensions surrounding Iran as factors underpinning gold.
In particular, there are worries that Iran's capture of 15 sailors late last
week may not be resolved as quickly as initially thought, they said. This comes
during a standoff between the U.N. and Iran over the latter's nuclear program.
Fund buying was reported. Gold added to its gains when the U.S. dollar sagged
after a soft U.S. housing report, said James Moore, analyst with
TheBullionDesk.com.
New single-family home sales fell in February to the lowest level in nearly
seven years, the Commerce Department said. They slid 3.9% to a seasonally
adjusted annual rate of 848,000, the lowest rate since 793,000 in June 2000.
The consensus forecast of economists had been for a rise to 1,002,500.
Shortly after gold closed, the euro was up to $1.3339 from $1.3283 late
Friday. The Nybot dollar index was down 24 ticks to 83.04.
The recently softer trend in the dollar was already constructive for gold and
silver, said Thomas Winmill, portfolio manager with the Midas Fund.
"When the Federal Reserve suggested last week there may be a reduced
possibility of interest-rate increases in the future, that was bullish for
gold," he said. The euro last week hit its strongest level against the dollar
in two months and remains less than a penny from this recent high.
May crude futures traded up 25 cents to $62.53 a barrel around the time gold
closed. However, it earlier topped $63 for the first time since March 9.
"There is a looser correlation between gold and the oil price, but it's still there," said Winmill. "The tighter correlation is between gold and the dollar.
But both of those are moving in sync - the dollar is down and oil is up - and
that typically carries gold up."
|
|
Gold also has been supported by a resumed increase in metal held by the
world's largest gold exchange-traded fund, streetTRACKS Gold Shares, said
Winmill. Gold to back the shares dipped from around 15.7 million a few weeks
ago to 15.3 million but has risen back to around 15.4 million, he said.
April gold hit a high for the day of $666.50, but stopped shy of the initial
resistance of $667.60, the high from Thursday. May silver stopped at a high of
$13.46, shy of Friday's $13.50 peak and Thursday's $13.575 high.
Meanwhile, Nymex April platinum followed gold and silver, rising $3.10 to
$1,236.50 an ounce.
"U.S. home sales were considerably less than forecast," said one trader.
"It's hurting the dollar. So we're seeing support in the commodities, with gold
and platinum up a little bit."
He also cited strength in crude oil.
April platinum peaked at $1,245, its strongest level since March 1.
Palladium lagged, however, with the June futures losing 50 cents to $359 an
ounce.
"Palladium is beating to its own drummer," said the trader, commenting that
its supply/demand fundamentals are not as tight as platinum's.
Palladium might not be as high as it is if it wasn't for speculative buying,
he added. As is the case with other precious metals, the funds are net long in
palladium.
Settlements (includes open-outcry and electronic trading):
London PM Gold Fix: $663 versus $656.25 Friday
Spot gold at 1:30 p.m. ET: $663.65, up $6.55 from previous
day; Range: $656.95-$664.35
April gold (GCJ07) $663.90, up $6.60; Range $657.10-$666.50
May silver (SIK07) $13.41, up 18.3 cents; Range $13.23-
$13.46
April platinum (PLJ07) $1,236.50, up $3.10; Range $1,228-
$1,245
June palladium (PAM07) $359, down 50 cents; Range $353.80-
$359
By
Allen Sykora, Dow Jones Newswires
Last Updated: March 26,
2007 14:31 ET © 2007 Dow
Jones & Company, Inc.
All Rights Reserved. |
Prospectus
