Gold Notches Gain as Investors Cash Out Bearish Bets
New York (Dec 26) Gold prices rose Friday, as investors locked in profits on bets for the precious metal’s decline in a thinly traded market.
Gold for February delivery, the most actively traded contract, was recently up $20.70, or 1.8%, to $1,194.40 a troy ounce on the Comex division of the New York Mercantile Exchange.
Prices for the precious metal are down 3% from December’s highs, as a swiftly improving U.S. economy has raised concerns that the Federal Reserve will lift interest rates earlier than expected in 2015. Gold struggles to compete with yield-bearing investments when rates rise.
On Friday, some investors appeared to be buying gold to cover their bets on a decline in prices, while others were looking for bargains after the metal’s steep drop, analysts said.
“Thin, postholiday trading conditions are likely exacerbating the bigger daily price move,” said Jim Wyckoff, an analyst at Kitco.com, in a note to clients. “Many traders and investors have checked out for the week, if not for the rest of the year.”
Silver for March delivery was recently up 2.9% to $16.160 a troy ounce, mirroring the rise in gold. March palladium was up 0.7% to $813.40 a troy ounce and is likely to be the only precious metal to end the year higher than when it started. Palladium prices are up more than 13% this year.