Gold prices have inched higher, briefly trading above $US1,400 an ounce, as reports of swift sales of the physical metal by bullion traders and coin stores bolstered investor interest in the precious metal.
Silver prices, however, slumped to their lowest level since October 2010 despite similar reports of robust silver coin sales.
Gold for April delivery, the front-month contract, on Friday rose $US3.30, or 0.2 per cent, to settle at $US1,395.30 a troy ounce on the Comex division of the New York Mercantile Exchange. June-delivery gold rose $US3.10, or 0.2 per cent, to $1,395.60.
Gold clawed its second straight day of gains amid reports of robust sales of physical gold by coin dealers and jewellers in Asia as well as by sovereign mints. Gold had touched a 26-month low on April 15, and retail buyers have been swift in flocking to the market in search of a bargain.
“Cheapest prices in two years may benefit industrial users as well as the jewellery trade,” said George Gero, a senior vice president with RBC Capital Markets.
The US Mint has sold 153,000 troy ounces of gold coins so far in April, up more than three-fold from the 50,000 troy ounces the Mint had sold as of last Friday.
Gold’s rebound ensnared some bearish traders overnight, Marc Ground, a metals analyst with Standard Bank, said in a note to clients.
As gold rose a flood of automatic stop-loss orders set for $US1,405 and $US1,410 brought fresh waves of buying to the market and sent prices even higher, he said.
Traders betting on lower gold prices often set automatic buy orders at pre-arranged prices to limit their losses should the market move higher.
Silver prices settled at their lowest level in more than two years, as they took their cues from the copper market. Both silver and copper are widely used in electronics, as both metals are good conductors of electricity.
Friday’s 1.7 per cent drop in copper futures pushed the industrial metal into a bear market, roughly defined as a 20 per cent drop from a recent high, and prompted some traders to shed both metals.
“When we see copper prices have a problem, that fallout can hurt silver prices,” said Sterling Smith, a commodity specialist with Citi Institutional Clients Group.
Silver for April delivery, the front-month contract, fell 28.4 US cents, or 1.2 per cent, to settle at $US22.955 a troy ounce.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $1,405.50; previous PM $1,393.75
Jun gold $1,395.60, up $3.10; Range $1,385.40-$1,424.70
May silver $22.960, down 28.5 cents; Range $22.865-$23.820
Jul platinum $1,423.90, down $5.10; Range $1,418.20-$1,449.90
Jun palladium $677.05, up $7.25; Range $665.60-$681.70
