Gold ends five-day winning streak as safe-haven demand fades, dollar firms

15:17, April 12, 2011      

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Gold futures on the COMEX Division of the New York Mercantile Exchange ended moderately lower on Monday, snapping a five day winning streak, as a compromise over the U.S. Federal budget dented gold's appeal as an safe-haven assets. Silver ended the day barely changed, but platinum retreated.

The most active gold contract for June delivery fell 6 dollars, or 0.4 percent, to 1,468.1 dollars per ounce.

A trader mentioned that the threat of a U.S. government shutdown served as a major catalyst driving up metals prices last week, as investors inclined to purchase gold as a hedge against political risk, therefore the news that the U.S. government avoided a partial shutdown with a last-minute deal late Friday also took some wind out of gold's sails.

Meanwhile, a strong rally in the greenback also dented demand for the precious metal Monday, as it made the dollar-denominated gold futures appear more expensive to buyers using foreign currencies.

Gold prices have been surging for five sessions last week and gained 3.2 percent in total, as the skyrocketing price of crude oil has been aiding global inflation and forcing many investors to choose the precious metals as their "safe haven" alternative investment.

An analyst said that gold prices notched another all-time high on Monday as the Globex June contract traded as high as 1478 dollars per ounce, the latest in a series of such milestones for the metal since last week, prompting investors to book in some profits following the record.

Mike Daly, a gold specialist with PFGbest here in Chicago pointed out that both gold and silver market are very technically overbought right now, however, the global environment is the fuel that has been driving these precious metals to their record levels.

"I expect these markets to remain volatile and vulnerable to U.S Dollar friendly news accompanied by periods of profit taking," Daly added.

May silver added 0.4 cents,to 40.612 dollars. July platinum fell 19.3 dollars, or 1.1 percent, to 1,792.8 dollars per ounce.

Source: Xinhua
 
 
     
 
 
 
     
 
 
 
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