Metals Stocks: Gold retreats as dollar rallies but finishes week strong
SAN FRANCISCO (MarketWatch) — Gold futures retreated, failing to secure a foothold above $ 1,300, as the U.S. dollar strengthened against rivals.
Gold for February delivery on Comex GCH5, -0.71% fell $ 8.10, or 0.6%, to settle at $ 1,292.60 an ounce, but closed up 1.2% on the week. The precious metal had settled above $ 1,300 on Thursday for the first time since August.
March silver SIH5, -0.14% fell 6 cents, or 0.3%, to $ 18.30 an ounce.
The ICE dollar index DXY, +0.68% a measure of the U.S. currency against six major rivals, climbed 0.8% to 94.77 Friday. The dollar’s gains come in large part at the expense of the euro, which has tumbled sharply after the European Central Bank’s full-fledged quantitative easing program aimed at staving off a deflationary spiral in the eurozone. See: Euro hits 11-year lows as sellers rush in after ECB.
A stronger dollar is typically bearish for commodities priced in the currency. Gold, for example, has seen its value in euros rise sharply as the shared currency plunges.
But analysts said uncertainty ahead of the Greek elections is offsetting some of the selling pressure. The anti-austerity, far-left Syriza party and the ruling conservatives, New Democracy, are battling for a first place finish. See: Greek election: The small party that could end up a kingmaker.
“Gold should remain in demand ahead of the Greek elections on Sunday, though afterwards a correction is conceivable following the sharp rise in recent days,” wrote strategists at Commerzbank, in a note.