Gold futures temporarily added to gains Friday after data showed U.S. wholesale prices jumped more than expected in May, building on an earlier rise that followed a news report indicating the U.S. Federal Reserve will try to calm fears about tapering its monetary stimulus program.
Gold futures for August delivery were up $8.40, or 0.6%, at $1,386.20 U.S. an ounce. Gold traded as high as $1,390.40 U.S. after the Labor Department in Washington said producer prices made a 0.5% monthly rise in May, the first positive reading in three months and exceeding forecasts for a 0.1% rise.
Gold later trimmed gains to trade at levels seen ahead of the data. Industrial production figures showed output was flat in May versus forecasts for a 0.1% rise.
The main mover for markets came after the close of floor trading late Thursday, when a report from The Wall Street Journal said that Fed Chairman Ben Bernanke next week will try to calm fears that any move to reduce the pace of its bond buying won’t mean the Fed is close to ending the program.
Fears the Fed will begin scaling back its stimulus program have weighed on gold, which had previously benefited from fears the Fed’s aggressive monetary policy efforts would debase the dollar and boost inflation.
But some strategists said they still expect gold to suffer from reduced stimulus in coming months, despite any near-term assurances from Bernanke.
Gold’s Friday rebound leaves the contract on track to eke out a 0.3% weekly gain, though it remains down 0.4% since the start of June and more than 17% this year.
Elsewhere Friday, July silver rose 42 cents, or 2%, to $22 U.S. an ounce, and copper for July delivery picked up one cent to trade at $3.20 U.S. a pound.
September palladium slipped 35 cents to $730.70 U.S. an ounce, and July platinum lost $2, or 0.1%, to $1,445.10 U.S. an ounce.
HSBC Securities on Friday cut its 2013 and 2014 forecasts for platinum, but said a growing supply squeeze would support prices.
HSBC now expects average platinum prices of $1,580 U.S. an ounce in 2013 and $1,725 U.S. in 2014 versus previous forecasts of $1,710 and $1,800 U.S., respectively, in a previous forecast.
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