Gold Finishes Week Strong, Nears $900 an Ounce
May 19th, 2008 | By Jason Simpkins | Category: Gold MarketGold futures closed at $899.90 an ounce Friday, the highest level in close to a month, gaining 1.6% on the week as lackluster economic data increased the precious metal’s appeal as an inflation hedge.
Gold for June delivery hit an intraday high of $904.50 on the New York Mercantile Exchange.
Gold futures finished strong last week climbing $13.50 Thursday and $19.90 Friday – a 4% jump in just two days.
“Gold surged initially on technical buying and short covering prior to weak economic data in the form of Empire and Philly Federal Reserve indices, industrial production, weekly jobless claims and the [Treasury International Capital System] data – all of which were neutral to negative, which exacerbated the move to the upside,” Mark O’Byrne, a director at Gold and Silver Investments Ltd. told MarketWatch.
The Treasury Department’s monthly TICS capital flow data showed net overall capital flows reversed “sharply” in the month of March to an outflow of $48.2 billion, after reflecting a 448.9 billion inflow the month prior, O’Byrne said.
The shift was “dollar bearish and gold bullish,” he added.
The Labor Department also reported last Thursday that the number of U.S. workers filing for initial jobless benefits increased slightly more than expected in the week ended May 10. First-time jobless claims rose to 371,000, up from 365,000 for the week prior. Economists surveyed by Reuters had forecast the number of new claims at 370,000. And the U.S. Federal Reserve reported industrial output fell by 0.7% in April.
That data was followed Friday by news that consumer sentiment was at a 28-year low. The U.S. consumer sentiment index, which is published by the University of Michigan and Reuters News Agency, fell to 59.5 in April, from 62.6 in March.
Gold’s price increase was accompanied by similar jumps in silver and platinum. July silver futures jumped 28 cents (1.7%) to close at $16.96 per ounce and July platinum futures rose $55.10 (2.6%) to close at $2,132 per ounce.
Oil also climbed to a record high $127.43 a barrel Friday, highlighting an investment-shift into commodities, as the U.S. economy continues to send mix signals.
Source: Gold Finishes Week Strong, Nears $900 an Ounce
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