Investing.com - Gold futures ended Friday’s session higher, as investors returned to the market to seek cheap valuations while others covered their short positions after prices fell to the lowest level since August earlier in the session.
Meanwhile, investors continued to monitor negotiations among U.S. lawmakers to avoid the looming “fiscal cliff” crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery rose 0.7% on Friday to settle the week at USD1,697.05 a troy ounce.
Gold prices tumbled to USD1,636.45 a troy ounce earlier Friday, the cheapest level since August 22, as a bout of technical selling set in after prices broke below their 200-day moving average, triggering fresh sell orders amid bearish chart signals.
200-day moving averages are considered key trading levels for many investors.
On the week, gold futures retreated 2.3%, the largest weekly drop since June and the fourth consecutive weekly decline.
Gold prices were likely to find support at USD1,636.45 a troy ounce, Friday’s low and resistance at USD1,672.75, Thursday’s high.
The dollar strengthened broadly on Friday as investors continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
Doubts over whether a deal will be reached ahead of the year-end intensified late Thursday after House Speaker John Boehner pulled his so-called “Plan B” fiscal cliff option, which called for tax increases only on Americans earning USD1 million or more per year, because his Republican colleagues did not support the legislation.
The U.S. House has adjourned for the Christmas holiday, fueling speculation that policymakers will not be able to avert the fiscal cliff. Without a deal, the U.S. could fall back into recession and drag much of the world down with it.
Adding to the negative trade environment, Italian Prime Minister Mario Monti tendered his resignation after only 13 months in office, paving the way for a highly uncertain national election in February.
The news prompted investors to shun riskier assets, like stocks and high yielding currencies, and move in to safe-haven assets, such as the U.S. dollar and Treasurys.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, rose 0.45% Friday to settle the week at 79.64.
A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
The precious metal has been under heavy selling pressure in recent sessions, as large institutional investors and hedge funds liquidated positions to lock in gains ahead of the end of the year.
Trading was expected to remain subdued in the week ahead, with year-end positioning driving flows and as holidays in many countries limit activity.
Lower-than-usual volumes could spark volatile trading, resulting in rapid changes in metal prices during the final weeks of the year.
Elsewhere on the Comex, silver for March delivery climbed 1.2% on Friday to settle the week at USD30.04 a troy ounce. Prices fell to a four-month low of USD29.66 on Thursday.
On the week, silver futures plunged 7%, the fourth consecutive weekly decline.
Meanwhile, copper for March delivery added 0.8% Friday to close the week at USD3.564 a pound. On Thursday, New York-traded copper futures fell to a three-week low of USD3.523 a pound.
Copper prices lost 3.1% on the week, the first weekly decline in six weeks.
Meanwhile, investors continued to monitor negotiations among U.S. lawmakers to avoid the looming “fiscal cliff” crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery rose 0.7% on Friday to settle the week at USD1,697.05 a troy ounce.
Gold prices tumbled to USD1,636.45 a troy ounce earlier Friday, the cheapest level since August 22, as a bout of technical selling set in after prices broke below their 200-day moving average, triggering fresh sell orders amid bearish chart signals.
200-day moving averages are considered key trading levels for many investors.
On the week, gold futures retreated 2.3%, the largest weekly drop since June and the fourth consecutive weekly decline.
Gold prices were likely to find support at USD1,636.45 a troy ounce, Friday’s low and resistance at USD1,672.75, Thursday’s high.
The dollar strengthened broadly on Friday as investors continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
Doubts over whether a deal will be reached ahead of the year-end intensified late Thursday after House Speaker John Boehner pulled his so-called “Plan B” fiscal cliff option, which called for tax increases only on Americans earning USD1 million or more per year, because his Republican colleagues did not support the legislation.
The U.S. House has adjourned for the Christmas holiday, fueling speculation that policymakers will not be able to avert the fiscal cliff. Without a deal, the U.S. could fall back into recession and drag much of the world down with it.
Adding to the negative trade environment, Italian Prime Minister Mario Monti tendered his resignation after only 13 months in office, paving the way for a highly uncertain national election in February.
The news prompted investors to shun riskier assets, like stocks and high yielding currencies, and move in to safe-haven assets, such as the U.S. dollar and Treasurys.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, rose 0.45% Friday to settle the week at 79.64.
A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
The precious metal has been under heavy selling pressure in recent sessions, as large institutional investors and hedge funds liquidated positions to lock in gains ahead of the end of the year.
Trading was expected to remain subdued in the week ahead, with year-end positioning driving flows and as holidays in many countries limit activity.
Lower-than-usual volumes could spark volatile trading, resulting in rapid changes in metal prices during the final weeks of the year.
Elsewhere on the Comex, silver for March delivery climbed 1.2% on Friday to settle the week at USD30.04 a troy ounce. Prices fell to a four-month low of USD29.66 on Thursday.
On the week, silver futures plunged 7%, the fourth consecutive weekly decline.
Meanwhile, copper for March delivery added 0.8% Friday to close the week at USD3.564 a pound. On Thursday, New York-traded copper futures fell to a three-week low of USD3.523 a pound.
Copper prices lost 3.1% on the week, the first weekly decline in six weeks.