Precious Metals Overview

Gold futures settle with a modest loss Monday, slipping back below $1,750 an ounce amid caution over developments in Europe and ahead of a spate of U.S. economic data and due out this week. For December delivery, gold slipped $1.80, or 0.1%, at settle at $1,749.60 an ounce on the Comex division of the New York Mercantile Exchange. That marked a slight pullback from Friday’s 1.3% climb to $1,751.40, its highest settlement since Oct. 17 “Gold has now found some very strong buying since the dip below $1,700, and we anticipate the rally to continue as deep bullish fundamentals are still in place — the Europe/Greece uncertainty and the U.S. fiscal-cliff uncertainty,” said Anthony Lazzara, chief executive of Lido Isle Advisors, an alternative investment firm in Newport Beach, Calif. Euro-zone finance ministers met Monday to discuss debt sustainability for Greece in an effort to clear the way for the nation’s next tranche of bailout money. Three euro-area officials said the European Central Bank is considering new ways to help reduce Greece’s funding gap by using the Greek debt in its investment portfolios, Bloomberg News reported Monday. The general mood in equity and currency trading also portrayed investor risk aversion, as markets digested the result of elections in Spain’s wealthy Catalonia region. In the Catalonian region’s elections, a nationalist party seeking a referendum on independence won fewer seats than required for an absolute majority, but enough to return as the single largest party in the local parliament. On the heels of the uncertainty in Europe, the euro weakened against the dollar, falling at $1.2961 from $1.2983 Friday afternoon in North America. The ICE dollar index, which measures the greenback against a basket of six other global currencies, rose to 80.258 from 80.190 Friday. The stronger greenback tends to weigh on prices for dollar-denominated commodities, including gold. With European news in the spotlight, U.S. and European stocks declined. Overall, gold prices hovered around unchanged Monday “as market participants are likely still getting back into their offices after a holiday week,” Lazzara said. But “we don’t see many reasons for gold to head lower into the new year.” He added that “further exacerbating the bullish tendency is the Gaza tension in the Middle East.” Looking ahead, the market awaits a flurry of economic data due out this week, according to Jeffrey Wright, a managing director at Global Hunter Securities. Consumer confidence will be an early driver Tuesday, but the “big data point will be Thursday’s GDP report,” he said. “Both will give signals if gold’s safe haven status is necessary in the immediate term to protect against movement in the U.S. dollar or a potential recession in early 2013 that has been widely discussed.” Elsewhere in the metals complex Monday, silver for December delivery rose 2 cents, or 0.1%, to end at $34.14 an ounce and December copper finished nearly flat, up less than a penny at $3.54 a pound. December palladium fell $6.40, or 1%, at $661.20 an ounce. January platinum futures slipped $6.10, or 0.4%, at $1,611 an ounce.
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