Gold ends up, posts a weekly gain of more than $27 By Polya Lesova,
Last update: 4:12 p.m. EST Feb. 29, 2008
NEW YORK (MarketWatch) -- Gold futures finished with gains
Friday, having hit a record high of $978.50 an ounce overnight,
as the metal continues to draw support from weakness in the
U.S. dollar and rising investment flows into commodities.
Gold for April delivery ended up $7.50 at $975 an ounce on
the New York Mercantile Exchange after earlier surging to
a record of $978.50.
Gold posted a weekly gain of $27.20 from last Friday's closing
level of $947.80. The metal surged 5% in February and is up
over 15% year-to-date.
With the U.S. dollar tumbling and inflation surging, gold
continues to break record highs and many analysts believe
that it might surpass the psychologically key $1,000 level
before the end of March. Read full story.
"Investment demand for gold and the rest of the precious
metals looks set to remain strong in the coming sessions as
investors look to offset rising oil prices and continued dollar
weakness," TheBullionDesk.com analyst James Moore said
in a research note.
"Investment demand for gold and the rest of the
precious metals looks set to remain strong."
James Moore, TheBullionDesk.com
Gold's movements over the past 24 hours have pushed the metal
back into overbought territory, but the scale of demand appears
sufficient to propel gold to $1,000 an ounce, Moore said.
"Resistance at the psychological level is likely to be
substantial, as investor profit-taking and producer selling
emerges; however, as was seen at $850 an ounce, there could
be some sizeable stops lurking just above the market, potentially
propelling gold even higher," Moore said.
On the currency markets Friday, the dollar extended its decline
against most of its major counterparts. The dollar index,
which tracks the performance of the greenback against a basket
of six major currencies, fell 0.8% to 73.70. The dollar earlier
dropped to a three-year low against the yen. See Currencies.
Weakness in the U.S. dollar boosted gold's investment appeal.
Gold, like many commodities, is denominated in dollars, and
a lower U.S. currency makes it more affordable in other currencies.
"We see that gold has an exuberance not expected by most,"
said Julian Phillips, an analyst at GoldForecaster.com. "With
such a rise in the last few weeks, we look outside the market
to see the price drivers."
The dollar and oil "are the most obvious, but the prospects,
almost confirmed now, are that one way out of the pressures
the world faces is inflation and heavy [inflation] at that,"
he said. "Hence the exuberance."
Also on the Nymex, March silver gained 18 cents to end at
$19.81 an ounce, and April platinum surged $25.90 to finish
at $2,180.70 an ounce.
March palladium dropped $13.30 to $571.95 an ounce, and March
copper ended down 1 cent at $3.85 a pound.
Elsewhere on the commodity markets, crude-oil futures closed
modestly lower after hitting a record high above $103 a barrel.
See Futures Movers.
Gold warehouse inventories rose by 59,813 troy ounces to stand
at 7.4 million troy ounces as of Thursday, according to Nymex
data. Silver stockpiles rose by 113,127 troy ounces to stand
at 134.9 million troy ounces, while copper supplies fell by
203 short tons to 13,101 short tons.
The Amex Gold Bugs Index (HUI:
486.07, -11.98, -2.4%)
fell 2.4% to 486.07 points.
As for the sector's exchange-traded funds, the StreetTracks
Gold Trust ETF (GLD: 96.18,
+0.19, +0.2%) edged up
0.2% to $96.18, the iShares Silver Trust ETF (SLV:
196.68, +0.02, +0.0%)
was virtually unchanged at $196.68 and the Market Vectors-Gold
Miners ETF (GDX: 53.12,
-1.26, -2.3%) dropped
2.5% to $53.05.