Gold drops from two-week high as activity slowed for Easter
Gold prices slipped from two-week highs on Friday as the euro eased after gaining against the dollar the previous day, with activity subdued due to Easter holidays in many Asian and most European markets.As the global economic recovery becomes more evident, gold may come under pressure, with investors turning to other commodities which traditionally gain on strengthening industrial demand such as platinum and palladium, traders said."Gold will be seen as an underperformer when the economic outlook brightens, with investors showing more interest in other commodities which benefit from rising industrial demand," said Wakako Harada, a senior trader at Mitsubishi Corp in Tokyo."An economic recovery is not necessarily a bullish factor for gold, which may succumb to selling pressure after its bull run," she said.Spot gold was confined to a narrow $5 range, trading at $1,120.00 per ounce as of 0513 GMT, down 0.5 percent from New York’s notional close of $1.125.50 per ounce. At this level, spot gold is set for a 1 percent weekly gain.Bullion ended the first quarter nearly 2 percent higher on currency volatility related to euro zone debt and firm stock markets, but it has struggled to sustain gains since hitting a record above $1,200 an ounce in December.U.S. gold futures for June delivery settled at $1,126.10 an ounce on Thursday on the COMEX division of NYMEX.Spot gold rose to $1,127.75 an ounce on Thursday, its highest since March 17, while platinum group metals rallied to their highest in more than 20 months as fresh investment money poured into commodities and other asset classes across the board.The number of U.S. workers filing new claims for unemployment benefits fell last week and factory activity in March hit its highest level in more than 5-½ years, strengthening hopes for continued economic growth without government support.Thursday’s data came a day before the release of the closely watched U.S. employment report for March, which is expected to show nonfarm payrolls rose by 190,000 jobs.As spot platinum hit a 20-mth high, the premium over gold widened to around $544, the highest since September 2008. While gold is seen top-heavy around $1,125, where profit-taking sets in, platinum looks set to gain further as industrial demand strengthens with the economic recovery.Spot platinum was at $1,660.00 an ounce after hitting a 20-month high of $1,671.50 on Thursday. Silver was at $17.83 after hitting a 10-week high of $17.97 on Thursday. Palladium was near a two-year high of $490 hit on Thursday.Investment into the world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, paused with its holdings unchanged at 1,129.823 tonnes.The world’s largest silver-backed exchange-traded fund, the iShares Silver Trust, said its holdings fell 61.01 tonnes to 9,217.17 tonnes as of April 1, down 0.7 percent from the previous business day.The euro eased 0.15 percent on Friday after rising against the dollar the previous day.