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Gold set for 4% weekly gain

February 14, 2014

Gold futures traded solidly above $1,300 U.S. on Friday, poised for a gain of roughly 4% for the week as prices extended their rally to an eighth session in a row, fueled by a combination of increased physical demand and economic jitters. April gold futures added $17.20, or 1.3%, to $1,317.30 U.S. an ounce on the Comex division of the New York Mercantile Exchange. March silver climbed 88 cents, or 4.3%, to $21.27 U.S. an ounce, with prices up about 6.7% for the week. Experts say the most active gold contract was on track for a 4.3% gain on the week. Year to date, it is up roughly 9.6%. Gold's support from softer U.S. economic data, however, could fade as the recovery gathers pace and the Federal Reserve continues to pare back its bond-buying program, according to one expert. The Fed's aggressive quantitative easing strategy had helped fuel a historic gold rally on worries the measures would undercut the dollar. Gold slumped hard last year as the Fed moved toward tapering its bond-buying program. Gold still has strong underlying support around $1,200 U.S. an ounce, he added, which is where the price stabilized in mid-2013 and toward the end of last year. On a more fundamental basis, it is the level at which a significant number of gold mines become unprofitable, he said, reiterating the firm's forecast for a gold price of $1,450 U.S. by the end of 2014.


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Source: Baystreet Commodities (Canada)


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