Business ExplorerBusiness World News and in-depth analysis

NEW YORK (Reuters) — Gold ended lower Friday, capping a volatile week in which the metal had risen toward its all-time high $1,030.80 an ounce as a steadily falling dollar boosted investment demand./ppYet, traders said that a lack of physical demand outside of the investment sector could trigger further price weakness./ppJewelry buying, which typically accounts for more than half of the total gold demand, has been lagging due to near-record-high prices./ppOn Friday, gold was pressured as waning risk appetite cut demand for high-yielding currencies, sending the dollar up sharply against a basket of major currencies. A weakening dollar has been powering gold’s rise this week./pp(This) is more a dollar story than anything else, said Eugen Weinberg, an analyst at Commerzbank. As long as this negative rally in the dollar continues, we will not see a trend reversal in gold./ppDecember gold futures settled down $3.20 at $1,010.30 an ounce on the COMEX division of the New York Mercantile Exchange./ppOn Thursday, dollar weakness lifted spot bullion to an 18-month high of $1,023.85 an ounce./ppSaxo Bank senior manager Ole Hansen said given the momentum gold has built up in its run towards record highs, significant dollar strength would be needed to trigger a move lower./ppThere has been a lot of buying into this — speculative longs are at a record high, ETF investments are at a record high — so we need to see the break above the highs from last year, he said./pWeak physical demandpMiguel Perez-Santalla, vice president of sales at Heraeus Precious Metals Management, said that the gold jewelry market was close to dead compared with the same time a year ago. Heraeus is also a processor and supplier of precious metals./ppThere is no real physical buying outside of investment. It’s not a good sign in terms of the actual use of the commodity, Perez-Santalla said./ppPhysical demand for gold in India, a key jewelry-buying center, should re-emerge as traders stock up for the festival season. Demand has been lackluster this year as high prices put off buyers./ppAmong other precious metals, silver, platinum and palladium also edged lower after hitting multi-month highs on Thursday, tracking gains in gold./ppThe three metals — which unlike gold are largely industrial in use — are also benefiting from an improved outlook for the global economy, which is fueling hopes rising industrial production will cause an uptick in demand./ppPalladium, which is used as a component in catalytic converters, broke through $300 an ounce for the first time since September 2008 on Thursday and hit a new one year high of $304 an ounce early on Friday./ppPalladium was last at $299.50 against $301.50 late on Thursday, while platinum was at $1,327 an ounce against $1,335.50. Silver was at $17 an ounce against its previous finish of $17.18. /p Fed not acting like there’s a recovery Fortune 500′s top stock: Freddie Mac

Similar Posts:

• After the gold rush
• Gold hits record high
• Gold shines for investors
• Gold rises, silver falls
• Oil dips near $76