Gold Make Advances On Bargain Hunting
On Friday, gold prices eked out small gains primarily because of a weak dollar and as traders sought bargains after the sell-off of the previous session and as the first quarter neared its end. Bullion was all set to end up 6.6 percent in the quarter after having outperformed the 1.7-percent drop in the dollar index. Gains of the gold for the quarter were well below those of other precious metals.
Spot gold rose 0.47 percent to $1,668.77 an ounce at 2:50 p.m. EDT (1815 GMT) and was trading in an unusually narrow $10 range ahead of the end of the first quarter. U.S. gold futures for June delivery raced higher than spot prices, to rise 0.92 percent to $1,670.1 an ounce. The rise was attributed to bargain hunting by George Gero, senior vice president of RBC Wealth Management, who said traders are betting on a flurry of new asset allocation into gold at the start of the second quarter.
Gold investors will be closely watching U.S. data in the second quarter for clues as easier monetary policy could hurt the dollar and support gold.
"A shift in focus from the negatives in the euro zone to the negatives in the U.S. may influence gold prices in the medium term," HSBC analysts said in a note. "The failure to address the key issue of the U.S. budget deficit while the Fed maintains a zero interest rate policy is positive for safe-haven assets like gold," they added.
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Weakening of the USD will
Weakening of the USD will give gold more chances to prosper and I do not believe the USD will be making any good prosper to bring gold down in the short run, at least.