• Sunday, May 19, 2024
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BusinessDay

Gold prices hold firm after second weekly gain

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Gold edged higher on Monday, with some buyers tempted back to the market after a second week of gains, which suggested last month’s price slide to the lowest in more than two years has run its course for now.

The precious metal rebounded quickly after coming under pressure on Friday from data showing U.S. employment rose more than expected in April, which eased concerns over the U.S. recovery and dampened talk that further monetary easing may be necessary.

Reuters report showed that Gold fell more than $25 an ounce from its highs on Friday, but recovered to end the week higher.

Spot gold was up 0.25 percent at $1,474.00 an ounce at 1232 GMT, while U.S. gold futures for June delivery were up $9.00 an ounce at $1,473.20. Trading was expected to be quiet in Europe, with London closed for a national holiday.

“Technically we are in a nice upward channel since the mid April low,” Saxo Bank Vice President Ole Hansen said. “We are sitting near the lower end of that channel so any dollar strength may just push it over the edge to the downside, but so far corrections have been pretty shallow.”

Outflows from bullion-backed exchange-traded products, which have hit record levels in recent months, have also slowed, he said. The world’s largest gold-backed ETP, New York’s SPDR Gold Trust, reported an outflow of 3.6 tonnes on Friday, against an average 6.6 tonnes in April.

“ETP reductions slowed to the lowest in four weeks last week and hedge funds reduced their gross short positions,” Hansen said. “All signs are that the market could potentially be gearing up for an attack on 1488 followed by 1525, especially considering the swift way we recovered despite price-negative news on Friday.”