Gold futures rose in electronic trade Tuesday, building on gains from the previous session that ended a lengthy string of losses.
Gold for June delivery rose $12.10, or 0.9%, to $1,396.10 an ounce in electronic action.
The precious metal on Monday was headed for its eighth consecutive loss, but staged a turnaround to finish higher by $19.40, or 1.4%, at $1,384.10 an ounce on the Comex division of the New York Mercantile. The last time gold fell for eight consecutive sessions was in 2009.
A warning by Moody’s Investors Service of a potential downgrade of U.S. debt this year weighed on the U.S. dollar Monday, with pressure on the greenback making way for gold to finish more than 4% higher than the low of the session, said CMC chief market analyst Ric Spooner late Monday.
A weaker greenback tends to make dollar-denominated commodities such as gold less expensive for holders of other currencies.
Monday’s rally represented a “key reversal” in technical terms, Spooner said.
“This is often looked upon by analysts as an indication that a downtrend has ended, at least for the short term,” he wrote. “While this development may encourage short-term traders, longer-term investors are likely to require more significant developments before changing their medium-term outlook on the gold price.”
The dollar on Monday also fell against major rivals after Chicago Federal Reserve Bank President Charles Evans said more time is needed to assess progress in the labor market. The Federal Reserve has said improvement in the jobs market will be key factor in deciding when it will begin tapering its purchases of bonds, which are aimed at stimulating economic growth.
Gold prices are still down about 6% this month, hurt in part by dollar strength and outflows from gold-backed exchange-traded funds, including SPDR Gold Trust .
Silver for July delivery on Tuesday picked up 24 cents, or 1.1%, to $22.82 a ounce, adding to Monday’s rise of 23 cents. Tracking the most-active contracts, silver futures on Friday closed at their lowest level since October 2010, according to data from FactSet.
But prices for copper, palladium and platinum didn’t follow up on gains logged in the previous session.
June palladium fell $4.45, or 0.6%, to $746.30 an ounce, and July platinum futures lost $2.90, or 0.2%, to $1,481.70 an ounce.
July copper was off 1 cent at $3.35 a pound.
Marketwatch
