Speculation that the central bank of the U.S. will not soon taper off its economy-spurring asset purchases prompted gold futures to barrel toward their strongest weekly performance in more than four weeks on Friday, according to Reuters.
The yellowish metal also climbed this week after equities slipped. But most beneficial to bullion were happenings with the U.S. Federal Reserve regarding the world's largest economy. The precious metal and the U.S. dollar typically perform the inverse of one-another.
Chairman Ben Bernanke with the U.S. Federal Reserve told a U.S. Congressional committee on Wednesday that the Fed might consider reducing the economic stimulus measures. But President James Bullard with the St. Louis Federal Reserve said on Friday the he will not cast a vote to support that type of reduction until inflation in the U.S. rises.
"This week presented something for everyone," vice president Ole Hansen with Saxo Bank told Reuters on Friday. "The bears have not seen any evidence of them being wrong, while the bulls got a bit of safe haven and on balance a rather dovish Bernanke."
At 11:33 a.m. on Friday, gold futures dropped 0.2 percent, a $2.82 loss to $1,388.23 per troy ounce.
Slight losses come after strong session
MarketWatch reports the slight losses that the yellowish metal endured on Friday came one day after it touched its top value in one week one day prior.
"From a technical perspective; we think the price has made a double bottom as the price held its yearly lows," chief market economist Peter Cardillo with Rockwell Capital Markets told MarketWatch on Friday. "On the other hand, the longer-term picture remains bright as the fundamentals have not changed. We see a short-term move to $1,425."
The U.S. is spearheading the globe's recovery from the Great Recession and economic data released on Friday indicated an uplifting nature.
Manufacturers in the U.S. released data noting orders for durable goods increased 3.3 percent last month, more than doubling projections of gains of 1.4 percent. The increase was linked with sharper demand for cars, airplanes and military equipment.
The U.S. dollar was tepid during trading on Friday, but that apparently had minimal bearing on the price of gold.
Bloomberg reports sentiment for gold is climbing in the aftermath of the Bernanke testimony.
As a consequence of the Fed chief noting record monetary stimulus will continue, 12 Bloomberg-polled analysts forecast the price of gold futures to increase next week. Nine analysts were bearish and eight analysts remained even.
The poll revealed the highest proportion of analysts with views of gold rising since the end of last month.
"Gold should still be in demand as an alternative currency," commodities analyst Daniel Briesemann with Commerzbank AG in Frankfurt told the news source on Friday. "The quantitative easing by central banks should lead to a depreciation in rates for major currencies and in the end should also lead to some inflation concerns, although this is not an issue at the moment. As long as institutional investors are selling gold ETP holdings, this will probably outweigh robust retail demand."
Despite a stronger performance this week, gold futures are down roughly 17 percent thus far this year. Speculation is mounting that gold futures will not mark a 13th consecutive year of gains.
Yet one commodity analyst noted that other tradables on the commodity complex also are facing rough times ahead.
"Our main view has been for a trough in commodities in the second quarter, with higher values towards year-end," chief commodity analyst Bjarne Schieldrop with SEB AB told Bloomberg on Friday. The "expectation is for monetary stimulus to continue through 2013. A U.S. recovery is positive, the question is the time lag before impacting commodities."
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