Source: MarketWatch
San Francisco— Gold futures closed Monday with a gain of more than $6 an ounce, recouping part of last week's losses of nearly 5%, as some weakness in the U.S. dollar and ongoing tension over Iran's nuclear-refining program helped renew investment demand for the precious metal.
"The marginally weaker dollar, coupled with the relentless violence in Iraq and the 'in-your-face' defiance emanating from Iran … are keeping gold bugs on the alert," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com.
Overall, the price action in metals reflects "a 'catching our breath' attitude from the trading pits," he said.
The April futures contract rose $6.20, or 1.2%, to close at $547.50 an ounce on the New York Mercantile Exchange, marking its highest session-ending level since last Tuesday. The contract closed Friday at its lowest level in more than two months, down 4.7%, or $26.70, for the week.
Prices are "drifting" between support that Nadler pegged at $530 to $540 and resistance around $550 to $552 an ounce. "We have to get some momentum behind it [or] else we sink lower again," he said.
For the moment, the $535-to-$550 range "appears to present the path of least resistance," he said.
At the same time, "this period will still be looked at, in retrospect, as one of the opportune moments to have accumulated some gold for the nebulous future," Nadler said.
Eye on the dollar
The dollar's recent strength "has certainly been one of the contributing factors in gold's six-week decline," said Dale Doelling, chief market technician at Trends In Commodities.
However, Doelling sees the dollar as having reached "an extremely overbought condition," raising prospects for what he said could be "a significant decline … just the tonic for what currently ails the precious-metals markets."
On Monday, the dollar slipped against the euro and was little changed against the yen. With no major economic reports on tap to start the week, currency traders are looking ahead to market-moving releases later this week, including readings on monthly foreign capital flows, the consumer price index and housing starts.
In other metals action Monday, May silver rose 19.7 cent to finish at $10.157 an ounce. June palladium tacked on $11.30, or 3.9%, to close at $300.90 an ounce and April platinum added $10.40 to finish at $1,023.10 an ounce. May copper moved 3.55 cents higher to close at $2.2455 a pound.
On the supply side, inventories of copper fell by 257 short tons to 37,873 short tons as of late Friday, according to Nymex.
Gold inventories were down 789 troy ounces at 7.55 million troy ounces and silver supplies stood at 127.3 million troy ounces, down 4,614 troy ounces
Indexes that track stocks in the metals-mining sector gained ground to start the week, looking to extend the previous session's strength after closing lower in five of the last six sessions.
The Philadelphia Gold and Silver Index tacked on 1.5% to stand at 128.75 points, while the CBOE Gold Index reached 124.78 points, up 1.4%.
And the Amex Gold Bugs Index climbed 1.8% to 297.77.
Among the standouts, shares of Coeur d'Alene Mines tacked on 3.7% to stand at $5.92 and Harmony Gold Mining traded at $13.39, up 3.2%. However, Agnico-Eagle Mines moved down 1.6% at $24.29.
Also, Alcan said Dick Evans has assumed the role of president and chief executive and subsequently announced a restructuring of the company's executive structure. Among the changes, the former Office of the President and the position of chief operating officer were eliminated, the aluminum producer said.
U.S.-traded shares of the Montreal-based company were flat at $42.84.
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