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Reuters
COMEX gold ends higher, withstands euro pullback
Monday June 16, 2:18 pm ET


NEW YORK, June 16 (Reuters) - COMEX gold recovered a second day Monday, losing momentum but keeping muscle tone after a rally in the euro fizzled just short of its recent peak on the dollar.
In fact, the dependable gold-euro relationship loosened a bit, with benchmark August (0#GC:) ending up $2.50 at $359.70 an ounce, backing off a $361.90 overnight high to $356.50 as the currency retreated. The contract rose $3.30 on Friday, having bottomed at a 1-month low Thursday at $351.50.


Spot gold (XAU=) was at $359.00/9.50 as COMEX trade wrapped up, up from $356.70/7.25 at Friday's close. Monday's afternoon spot fix in London was $358.30.

"It's kind of on its own," said a chief dealer. "There seems to be a changing of hands."

A firmer dollar capped gold after the Federal Reserve Bank (News - Websites) of New York said its Empire State manufacturing conditions index -- a relatively new survey and only marginally influential-- rose to a record 26.8 in June, from 10.6 in May.

Selling by commodity funds circled the gold ring late morning, but futures moved back into the black as the trade stepped in to buy before the close.

"We were down at $351.90 on Friday and went up to $361.90 overnight. We had to hold around $356.50-$357.00 based on just that range and we did. So I think you are getting a push back toward those highs," said a COMEX broker.

The euro was last quoted at $1.1841/44, down from $1.1868/74.

It touched $1.1931 overnight, its highest price since topping at $1.1932 on May 27, when gold rode its coattails to a 15-week high at $375.80. Because gold is priced in dollars, the stronger euro enhances the bullion buying power of European investors.

"At some point gold has to trade off its own fundamentals and stand by itself, rather than using the fate of the U.S. dollar as a constant crutch," wrote Societe Generale in New York's morning metals note.

Large traders slashed their gold holdings last week, according to CFCT Commitments of Traders data released late Friday. But speculators remain extremely overbought.

The net fund long position in COMEX gold fell 19,448 contracts to 65,599 contracts as of Tuesday, from 85,047 lots on June 3. Even after the washout commodity funds own almost as many longs as the 66,814 peak from back on February 4, when gold futures hit a 6-1/2 year high at $390 an ounce.

July silver (0#SI:) rose 3.7 cents to $4.612 an ounce, trading $4.57-$4.62. Spot silver (XAG=) closed at $4.60/62, up from $4.57/4.59 an ounce late Friday. The fix was at $4.59.

NYMEX July platinum (0#PL:) was $3.10 higher at $667.70 an ounce. Spot platinum (XPT=) was at $667.00/672.00.

September palladium (0#PA:) fell $1.00 to $185.0 an ounce. Spot palladium (XPD=) was last quoted at $181.50/187.50.