Forexpros – Gold futures bounced higher on Friday on oversold technical factors and a weaker U.S. dollar, despite bearish fundamentals.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1594.75 a troy ounce during mid U.S. trade gaining 1.10%.
It earlier hit a high of USD1603.45. Gold futures were likely to find support at USD1590.09 and technical resistance exists at USD1598.29.
The weakening U.S. dollar counteracted Indian demand concerns and heavy bearish sentiment.
The dollar gained strength against the euro on a lessening of safe haven demand and an improving U.S. economic picture.
Technically extreme oversold conditions were exasperated, in the precious metal, when commodities plunged earlier in the week; setting up a classic technical rebound.
Miquel Perez-Santalla vp of sales at Hereaus Precious Metals told Bloomberg, “Bears are in the drivers seat. But, the problems in Europe have not been solved; we will see higher gold prices.
For much of the last year, investor’s typical reaction to bad news from Europe was to buy gold, as its boosts safe haven appeal of the precious metal, but that relationship has unraveled recently.
Instead, gold futures have moved largely in line with other commodities and risk assets over the past month, with investors preferring the relative safety of the U.S. dollar.
Elsewhere on the Comex, silver for March delivery advanced 1.35% to trade at USD29.65 a troy ounce, while copper for March delivery soared 2.00% to trade at USD3.33 a pound.
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