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Gold futures soar to a near two-week high, amid weaker dollar

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Investing.com -

Investing.com -- Gold futures surged on Friday afternoon to near a two-week high, as relatively dovish comments from Federal Reserve chair Janet Yellen earlier in the week continued to weigh on a weakening dollar.

While the Fed removed its stance of remaining patient on its timing of a potential interest rate hike, Yellen appeared to strike a dovish tone with lower forecasts on inflation and GDP growth. The U.S. central bank also forecasted that interest rates will rise at a slower pace than had previously been expected.

Gold struggles to compete with high-yield assets in periods of raising interest rates.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 15.70 or 1.34% to 1,184.70 a troy ounce. It marked the third straight day that prices for futures increased by more than $15 an ounce.

Gold futures likely earned support at 1,148.20 the low from March 17 and resistance at 1,196.20 the high from March 5.

The euro on Friday continued to rebound against the dollar, as German chancellor Angela Merkel took a hard stance against Greece in negotiations regarding the euro zone's bailout package to Athens. Merkel set strict terms on the critical stimulus package Greece could receive from its euro zone creditors, reiterating that it will only be approved if the euro zone approves a list of economic reform measures Athens intends to propose shortly.

The euro rose nearly 2% against the dollar in U.S. afternoon trading to 1.0867. EUR/USD has rallied strongly from its level on March 13, when it reached an 11-year low at 1.05.

Dollar-denominated commodities such as gold become more expensive for foreign buyers when the dollar appreciates.

In India, gold futures fell by Rs 60 to Rs 26,315 per 10 grams amid lower demand from jewelers and retailers. The modest decline came one day after gold soared by Rs 293 or 1.14% on the Multi Commodity Exchange. India is the world's largest purchaser of the precious metal.

Elsewhere, silver futures for May delivery soared 4.68% or 0.754 to 16.86.

Copper delivery for the month of May also rose 3.67% or 0.098 to 2.773.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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