Gold ends lower, but gains over $26 on the week
Gold futures finished slightly lower on Friday, but posted a gain of over $26 on the week, as dollar weakness capped the decline in gold prices.
Gold for December delivery ended down $2.80 at $834.70 an ounce on the New York Mercantile Exchange. Gold gained $26.20 on the week from last Friday’s closing level of $808.50. “Gold prices took a small break from the week’s straight-line rally on Friday, as participants cashed in a just a few very profitable chips,” said Jon Nadler, an analyst at Kitco Bullion Dealers, in a research note. “There are some emerging signs of fatigue in this very aggressive and long-lasting of rallies, but the jury remains out as to the depth and speed of a potential correction,” Nadler said.
On Thursday, gold finished at a record closing high of $837.50, topping Wednesday’s record by $4. On Wall Street, US stocks fell sharply, extending two days of losses after Qualcomm Inc. offered a disappointing forecast and Wachovia Corp. hiked its loan loss estimates, keeping worries about the ongoing credit crisis in play. “Round two of the ‘credit crisis’ is developing further and creating an environment of additional fear and rising uncertainty,” said Peter Spina, president of GoldSeek.com, in emailed comments. “The bull market in gold appears to be undergoing a mega-bull run higher, aided now by this crisis which includes the sinking dollar,” Spina said.
On the currency markets, the dollar remained on a downward path, sliding about 1.5% against the Japanese yen as financial woes on Wall Street continued to take their toll on stocks, while a bleak consumer sentiment survey further sparked concerns about US economic growth. The dollar index, which tracks the performance of the greenback against other major currencies, fell 0.1% at 75.410. Dollar-denominated assets, such as gold and crude oil, benefit when the US currency drops. Crude-oil futures rose. “People look at gold as a store of value,” said Brad Zigler, managing editor at HardAssetsInvestor.com. “And the uncertainty that paper-based assets seem to be exhibiting right now, especially in light of the credit crunch and the possibility that US securities will become less attractive to foreign holders, certainly makes gold attractive as a store of value,” he said. (marketwatch)
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