The most actively traded contract, for June delivery, rose $US1.40, or 0.1 per cent, to settle at $US1642.80 a troy ounce on the Comex division of the New York Mercantile Exchange.
For the week, futures slid by 1 per cent. Continued worries about Spain's still high borrowing costs sent investors out of gold and into the perceived safe haven of the US dollar. And in India, the world's top gold importer, physical gold purchases ahead of a major festival disappointed some gold bulls.
A weaker US dollar also supported gold prices. The greenback slipped against a trade-weighted basket of currencies, with the ICE US Dollar Index falling to the lowest level since April 3. US dollar-denominated gold futures appear cheaper to buyers using foreign currencies when the greenback weakens.
gold traders were cautious to position themselves ahead of next week's Federal Open Market Committee meeting. The reserve bank's monetary policy-setting arm is due to release a statement April 25.
Gold prices tend to rise in tandem with expectations of monetary stimulus, as concerns about an uptick in inflation lure investors to stock up on gold, which is considered a hedge against inflation and a safe-harbour investment.
With the dollar weakening versus the euro, gold should do well in the week and month ahead. I look for a $1,680 target next week and longer term, the next 4-6 weeks, $1,725 is a reasonable upside objective
Generally a weaker dollar supports gold since the metal is denominated in dollars. Technical analysts said $1,620 an ounce is a key chart level for gold to hold next week.
Those who see weaker prices also spoke of currency factors, suggesting that the euro may come under pressure if there are any surprises in this weekend’s French presidential elections or weaker-than-expected results regarding eurozone manufacturing data due out next week
In the Kitco News Gold Survey, out of 33 participants, 25 responded this week. Of those 25 participants, 11 see prices up, while six see prices down, and eight are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
In the Bloomberg Gold Survey : 15 of 31 traders and analysts surveyed by Bloomberg said gold would gain next week and six were neutral. Futures on Comex increased 5 percent to $1,645.70 an ounce this year. Prices gained the previous 11 years and holdings in gold-backed exchange-traded products are about 0.7 percent below the record 2,410.2 tons set March 13, data compiled by Bloomberg show.
Two reports that gauge consumers' views on the economy are due next week.
The Conference Board's confidence index for April is set to be released Monday. The private research group's index dropped to 70.2 in March after jumping more than 10 points in February. Although the job picture is improving, households are facing rising gasoline prices.
Meanwhile, the Thomson Reuters/University of Michigan consumer sentiment index for the end of April is due Friday. The index at the end of March stood at 76.2, compared with the 75.3 posted at the end of February.
Housing data--including March new home sales and pending home sales as well as the February S&P/ Case Shiller home price index--and durable good orders are also among the economic indicators to be released next week. FOMC Meeting Planned, No New Policies Expected
Federal Open Market Committee, the Federal Reserve's policy-setting panel, will commence a two-day policy meeting Tuesday. The Fed isn't expected to announce any new policies and is expected to affirm its plans to keep rates at exceptionally low levels at least through late 2014. Fed Chairman Ben Bernanke is also likely to reiterate the central bank's commitment to add stimulus if needed.
Conferences
Among the significant conferences next week are Barclays Capital Retail and Restaurants Conference Tuesday and Wednesday in New York; Hart Energy's Developing Unconventional Gas Conference & Exhibition Monday through Wednesday in Fort Worth, Texas; and the Institutional Investor Inc. Defined Contribution Forum Wednesday and Thursday in Miami, Fla.
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