July 1, 2016 / 6:51 PM / 4 years ago

PRECIOUS-Gold heads for fifth week of gains and silver soars

* Silver breaches $19 level for the first time since Sept
    * Platinum, palladium mark highest since mid-May

 (Updates prices; adds comment, second byline, NEW YORK
    By Devika  Krishna Kumar and Clara Denina 
    NEW YORK/LONDON, July 1 (Reuters) - Gold rose 1 percent on
Friday and was heading for its fifth weekly gain, supported by a
weaker dollar and prospects for further monetary policy easing
in the wake of Britain's vote to leave the European Union.
    Safe-haven demand for the metal spurred most of the gains as
investors rushed to protect themselves against the uncertainty
in the lead up to Britain's shock vote to exit the European
Union, dubbed 'Brexit.' 
    Concerns over the trajectory of global growth, dovish
comments from the U.S. Federal Reserve Chair Janet Yellen and
retail demand had supported gold ahead of last week's Brexit
    Spot gold rose to a session high of $1,341.40 an
ounce, and was 1.2 percent higher at $1,337.6 by 2:23 p.m. EDT
(1808 GMT). The metal gained 8.8 percent in June, its biggest
monthly rise since February. U.S. gold futures for August
delivery settled up 1.4 percent at $1,339.
    Gold's strength benefited silver, which breached the
$19 an ounce level for the first time since September 2014. It
rose as much as 5 percent to $19.64 and traded 4.9 percent
higher at $19.61. 
    Silver was on track for its best week since August 2013
having gained about 11 so far. 
    "The U.S. dollar, and therefore buck-denominated precious
metals, will be in focus again next week as the attention turns
away from Brexit slightly and more towards economic fundamentals
and U.S. monetary policy," Fawad Razaqzada, market analyst for
forex.com, said in a note.
    The dollar fell 0.5 percent against a basket of six
currencies, while European stocks recovered on signs that
central banks such as the Bank of England, the Bank of Japan and
the European Central Bank will loosen monetary conditions even
    Concerns about the global economy have made chances of a 
U.S. rate rise in coming months less likely, analysts say, but
much will depend on U.S. economic data and markets will be
watching non-farm payrolls due on July 8 in particular for
    A strong jobs report and favourable revisions for the June
nonfarm payrolls data could give the dollar a boost and
undermine gold and silver, at least temporarily, Razaqzada said.
    Low U.S. interest rates are positive for gold because the
opportunity cost of holding it decreases and the dollar
typically falls, making the metal cheaper. 
    Societe Generale raised its gold price forecasts on Thursday
on concerns about the ongoing political, financial and economic
fallout of Britain's vote last week to leave the European Union.
    "Looking ahead, it seems that gold will remain one of the
major beneficiaries in the current backdrop, as heightened
volatility and lingering uncertainty will keep investors' risk
appetite in check." the bank said.
    Platinum marked its highest level since May 18 rising
as high as $1,055 an ounce and was on track for its best weekly
rise since October last year. 
    Palladium, heading for its best week since early
March, rose to its highest since May 13 at $605.40, and was up
1.2 percent at $602.05.

 (Additional reporting By Nallur Sethuraman and Vijaykumar
Vedala in Bengaluru; editing by Susan Fenton and Marguerita
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