Gold, silver and copper prices all rose on Monday, as the US dollar weakened and a multibillion euro aid package provided support for the euro. With a shortened trading week, economists believe that the rest of the week will see thin trading and volatile movements in the price of gold. See the following article from The Street for more on this.
Gold prices were firmly above $1,100 Monday as the U.S. dollar weakened.
Gold for April delivery was up $4.30 to $1,108.60 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,114.70 and as low as $1,103.10. The U.S. dollar index was slipping 0.31% to $81.35. Gold’s spot price was rising more than $4, according to Kitco’s gold index.
A resolution to the Greek debt crisis and an international conflict in South Korea boosted gold prices Friday. Future contracts on the Comex traded higher on improving risk appetite after a joint IMF/EU bailout was announced for the first euro-zone country in danger of default. The combined multibillion euro aid package provided support for the euro after the currency fell to 10-month lows, which buoyed gold prices.
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Spot gold received an even bigger boost as a safe haven bid after a South Korean ship sank off the coast of North Korea. The suicide bombing in Moscow, which has killed 36 people so far, has also increased gold’s appeal. Investors rotate into hard assets during times of financial or international uncertainty as an alternative investment.
The week ahead is expected to see thin trading with volatile moves. Markets are closed on Friday and some analysts anticipate sparse volume as traders observe the Passover and Easter holidays. Thinner trading leads to more unpredictability. Another upcoming factor for gold is Friday’s nonfarm payroll report. Many economists are looking for a positive number that, on the one hand, could increase investor risk appetite, but also might prompt the Federal Reserve to raise interest rates sooner than expected.
With uncertainty still infecting markets, gold’s trading range will stay tight. “The EUR/USD cross does look likely to provide further direction to gold,” says James Moore, analyst at thebulliondesk.com, in his daily metals report. “We expect dips below $1100 to be viewed favorably by both investors and physical players with chart support pegged at $1088 and resistance above around the 100-day MA at $1120.”
Silver prices were up 49 cents to $17.40 while copper was rising 13 cents to $3.53.
Mining stocks, a more leveraged way to invest in gold, were gaining some strength. Barrick Gold(ABX) was rising 0.56% to $37.62 and Newmont Mining(NEM) was up 1.42% to $50.08. Other large cap miners Kinross Gold(KGC) and Goldcorp(GG) were trading slightly higher at $17.18 and $37.37, respectively.
Shares of Randgold Resources(GOLD) were rising 0.05% to $74.12. HSBC initiated the stock with an overweight rating. Freeport McMoRan Copper & Gold(FCX) was popping 4.07% to $82.39 and Yamana Gold(AUY) was rising 1.22% to $9.99.
This article has been republished from The Street. You can also view this article at The Street, an investment news and analysis site.