Gold slips ahead of holiday weekend

August 31, 2014

San Francisco (Aug 31)  Gold futures on Friday retreated from their highest settlement price in a week, slipping ahead of the holiday weekend as investors await another batch of U.S. economic data.

Gold for December delivery GCZ4, -0.19%  was down $4.40, or 0.3%, to $1,286.00 an ounce. September silver SIU4, -0.69%  lost 9 cents, or 0.5%, to $19.44 an ounce. Bullion rose 0.4% in August, and gained 0.6% on the week.

A day earlier, gold prices advanced as investors moved away from stocks and sought safe havens in the face of the escalating conflict in eastern Ukraine. The conflict in Ukraine has pushed palladium prices higher, as Russia is one of the world’s top producers of the precious metal.

On Friday, however, gold was under pressure alongside the euro and declining inflation in the euro zone in August, said James Steel, a metals analyst with HSBC Securities, in a note.

Gold is often sought after as a protection against inflation.

“Bullion prices (are) likely to trade sideways near-term,” Steel said. The metal was further weighed down by mixed U.S. economic data, which included declining consumer spending in July and a consumer sentiment index that came in higher than expectations.

President Obama said at a news conference on Thursday that Russia has deliberately and repeatedly violated the sovereignty and territorial integrity of Ukraine.

Dennis Gartman, the editor of The Gartman Letter, told Kitco News that he is also looking for gold to remain rangebound in dollar terms, though he’s much more upbeat across various currencies.

“I’m really quite bullish on gold in yen and euro terms,” he said. “But I am absolutely, utterly, totally, completely, without equivocation neutral on gold in dollar terms.”

Elsewhere in metals trading, September silver SIU4, -0.69%  declined nearly 14 cents, or 0.7%, to settle at $19.398 an ounce on Comex. Silver lost nearly 5% in August, and rose less than 0.1% on the week.

October platinum PLV4, -0.02%  slipped 50 cents to settle at $1,424.70 an ounce, while December palladium PAU4, +0.95%  advanced $11.45 to $909.55 an ounce.

Concerns about supplies hurled palladium to a 13-year high on Friday. Russia produces nearly 40% of palladium output, with South Africa a close second with 38%, HSBC’s Steel said.

Ukrainian separatists, who Western powers say are backed by Russia, advanced toward a key port city, according to reports Friday.

Source: MarketWatch

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