Gold News & Info

Source: CBS.MarketWatch.com

San Francisco— Gold futures closed higher Friday, reversing an earlier fall to near a three-week low, as longer-term investment prospects from an improving economy and low interest rates outweighed short-term bets.

But prices still ended the week down more than $1 an ounce.

On the New York Mercantile Exchange, gold for December delivery closed at $383.40 an ounce, up $2.70 for the session, but down $1.20 from the week-ago finish. The contract fell to $376.50 an ounce before reversing course Friday.

"Federal Reserve Chairman Greenspan has made it clear that he is in no hurry to raise the federal funds rate, and his predominant concern has been for deflation," said Todd Hultman, president of Dailyfutures.com, an information and research site for commodities.

"The fact that he is willing to risk allowing a weaker dollar and more inflation favors gold and commodity prices ahead of the dollar and stock values," he said. "Investors do not like to buy into currencies that the central bank is devaluing," he added.

John Person, head financial analyst at Infinity Brokerage Services believes the market will test $400 to $420 by year-end because of rising deficits, investor hedging against inflation, and the outlook for a weaker dollar.

After initial gains, the dollar lost ground against the yen and the euro Friday, and the broader markets were only modestly higher despite upbeat economic data.

The Labor Department said earlier Friday that the U.S. economy had added more than 250,000 nonfarm payroll jobs over the past three months — further indication of an improving economy.

"The jobs report contained good news, but not stellar news," said Person, so the market may see it as only a "one-month event." He said a "back-to-back and improving number will be the concern."

Against this backdrop, "gold continues to be somewhat conflicted, resulting in range-bound trading," said Grady Garrett, chief trading strategist at EnergyTrendAlert.com, a commodity information provider.

Gold prices are down from the week-ago close of $384.60 an ounce. "Over the short term there is little reason for buyers to aggressively bid prices up, especially as many global market participants are starting to focus on the rising equity markets," said Garrett.

However, the long-term outlook of a recovering economy, combined with a "permissive" Fed policy, "should be bullish" for gold in the long run, he said.

Friday's reversal in gold is a "huge turnaround," said Brien Lundin, editor of Gold Newsletter.

Gold logged gains despite upbeat news on the U.S. labor market and recent profit-taking, he said.

Other metals gain

Meanwhile, prices for silver, copper, and platinum gained, reversing declines in the previous session and benefiting from expectations that an improved economy would boost demand for industrial metals.

December silver climbed 10.1 cents to close at $5.058 an ounce, and December copper tacked on 0.45 cent to close at 94.45 cents a pound.

January platinum added $3.500 to close at $759 an ounce. Its sister metal, December palladium, closed unchanged at $206 an ounce.

Inventories for gold, silver and copper were unchanged as of late Thursday compared with the previous trading day, according to Nymex. Gold inventories stood at 2.912 million troy ounces. Silver was at 118.2 million troy ounces and copper 294,422 short tons.

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