Gold shoots for fifth straight week

Written by fe Bureau | New Delhi | Updated: Mar 8 2014, 10:19am hrs
Gold headed for a fifth straight week of advance despite a fall in intraday trade on Friday, as fears of an armed conflict in Ukr-aine enhanced the appeal of safe-haven assets earlier in the week. Copper, however, hit its meanest since late November on Friday on poor demand in China, and brent crude, too, fell mainly due to seasonal factors.

Having gained almost 1% on Thursday, spot gold fell marginally by 0.1% at $1,349.10 an ounce by 1031 GMT on Friday as physical demand from leading consumer China dropped at the current elevated level. However, the precious metal has risen by almost 2% so far this week and 7% over the past five weeks. April gold futures eased 0.2% at $1,348.90 an ounce by 1031 GMT.

Physical demand for gold in China has dropped over the past few days, as reflected in a decline in premium to $1 per ounce from $20 earlier this year.

Investors are awaiting the US non-farm jobs data, to be released later on Friday, for specific indications of the strength of the labour market and its likely impact on the pace of a rollback of bullion-friendly stimulus programmes by the Federal Reserve.

On Monday, gold had scaled a four-month peak at $1,354.80 an ounce on mounting tensions between the West and Russia over Ukraine's Crimea peninsula. Analysts expect gold prices to go up further if the current stand-off between the West and Russia over the Ukraine crisis worsens.

Copper dropped to its lowest in more than three months in intraday trade on Friday on concerns about slower economic growth in top consumer China as it aims to trim excess industrial capacity in its "war" against pollution. Moreover, an unprecedented domestic bond default in recent history in the world's second-largest economy by a loss-making solar equipment producer Chaori Solar dampened market sentiment about China's will to bail out firms in trouble, which would have a spillover effect on manufacturing by small and medium enterprises.

Three-month copper on the London Metal Exchange dropped almost 2% to $6,914 intraday before hitting $6,930 by 1051 GMT. The metal has tumbled almost 5% so far this year.

However, nickel has emerged as the top performing metal so far in 2014 by gaining as much as 11.5%. However, three-month nickel on the LME eased 0.3% at $15,420 a tonne in intraday trade on Friday from $15,470 at the close on Thursday.