Gold posts modest gains after sliding on dollar's rally
New York (Dec 20) Gold futures came off earlier lows and moved into positive territory on Friday after investors felt the commodity had fallen too far amid a dollar rally.
Gold prices have tumbled in recent months as markets prep for the Fed to raise interest rates, which is widely seen taking place in 2015, as higher borrowing costs chip away at the precious metal's appeal as a hedge to weaker paper currencies, the product of loose monetary policy.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.13% at $1,196.30, up from a session low of $1,194.40 and off a high of $1,201.40.
The February contract settled up 0.03% at $1,194.80 on Thursday.
Futures were likely to find support at $1,182.00 a troy ounce, Wednesday's low, and resistance at $1,213.90, Thursday's high.
The dollar continued to see support after the U.S. Department of Labor said on Thursday that the number of individuals filing for initial jobless benefits in the week ending Dec. 12 fell by 6,000 to 289,000 from the previous week's revised total of 295,000. Economist had forecast an increase of 1,000.
The data came a day after the Fed said it would be "patient" before raising rates, guidance which it said is consistent with earlier assurances statement that rates would stay low "for a considerable time."
Fed Chair Janet Yellen said the central bank was unlikely to raise rates for the "next couple of meetings" indicating that a move in April at the earliest is possible.
Still, the dollar firmed on the notion that the days of rock-bottom interest rates are coming to an end, which chipped away at gold prices until bottom fishers sent the commodity back into positive territory.
Elsewhere, silver for March delivery was up 0.71% at $16.047 a troy ounce, while copper futures for March delivery were up 1.29% at $2.890 a pound.