NEW YORK (MarketWatch) -- Gold futures rose on Friday, after the U.S. reported growth rose more than expected in the fourth quarter, lifting the value of the precious metal as a hedge against inflation, even as a rising dollar capped gold's gains.
Signs that Greece might be avoiding a default on its debt also helped lift investors' appetite for risk-taking, which has benefited gold and commodities for more than a year.
"GDP figures and Greece apparently not defaulting gave positive reads enough for some Friday short-covering as today is the last day of the roll over from February gold to April gold," the metals team at RBC Wealth Management wrote in a note.
Gold for April delivery was recently up 30 cents at $1,085.10 an ounce in electronic trade.
Coming out of the worst recession in generations, the U.S. grew at the fastest pace in six years in the fourth quarter. Real gross domestic product increased at a 5.7% seasonally-adjusted annual rate in the final three months of the year, the best quarterly growth since late 2003, the government estimated. The economy grew 2.2% in the third quarter.
The 5.7% increase was faster than the 5.4% gain expected by economists surveyed by MarketWatch. Read more on the GDP.
Gold's gains were somewhat held up by a rising dollar, which rose sharply after the U.S. GDP. A stronger dollar has tended to pressure gold and commodities. Over the past year, investors have used the safety of the cheap dollar, which can be borrowed at near zero interest rates.
But "for the foreign exchange market, the critical question is whether the strong U.S. [GDP] report will finally cause the dollar to trade off of its economic outlook and not risk appetite," said Kathy Lien, director of currency research at Global Forex Trading, in a note.
Nick Godt is MarketWatch's markets editor, based in New York.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment