Gold futures gained almost $10 an ounce, silver up $1.17

Gold futures gained almost $10 an ounce by the close Friday, rebounding from earlier losses with the dollar losing ground as traders awaited the outcome of talks between Greece and its bondholders.

Investors also digested news that U.S. existing home sales climbed in December but came in short of expectations.

“Short term, a stronger euro and a weaker dollar are bullish for gold,” said Brien Lundin, editor of Gold Newsletter. “Longer term, however, a weakening euro due to monetary easing will help drive gold higher.”

Gold futures for February delivery  rose $9.50, or 0.6%, to settle at $1,664 an ounce on the Comex division of the New York Mercantile Exchange after tapping a low of $1,645.20 during the session. Prices added 2% for the week.

Silver stood out in Friday’s trading, leading the gains on a percentage basis among major metals. Platinum climbed as well, but prices for copper eased after gains in the past three sessions.

For now, “gold continues to benefit from the ‘risk-on’ theme of recent trading sessions,” said Lundin.

“The lack of bad news from Europe, and the potential for some positive developments on that front, have emboldened investors to rebuild positions in gold,” he said. “Basically, it’s becoming apparent that, unless Europe’s financial house of cards collapses beforehand, the only way to keep it intact will be to print much more money. And this will be very good for gold.”

Taking cues from the greenback

Gold traders also took cues Friday from trading in the dollar.

The dollar index , which measures the U.S. unit against a basket of six other currencies, traded at 80.185, little changed from 80.198 late Thursday after having tapped a high of 80.438 earlier.

“It’s all about the speculation that a Greece debt deal pushes the euro much higher and [the dollar] relatively much lower, thus you can smell the speculation all over the planet in a relatively stronger yen and the metals,” said Richard Hastings, a macro strategist at Global Hunter Securities.

Greek officials have been meeting with the Institute for International Finance, which is leading negotiations on behalf of private creditors over the nation’s sovereign debt.

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Posted by Silver Guru on Jan 21 2012. Filed under Silver prices. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry