Gold futures pushed back into positive territory Friday, but was on track to end the quarter with a nearly 24% drop after a stampede for the exits this week on fears a stronger U.S. economy would continue to push up government bond yields and the U.S. dollar, tarnishing the attractiveness of the precious metal.
Gold for August delivery erased an early dip below $1,200 U.S. an ounce to trade at $1,219 U.S., a gain of $7.40, or 0.6%. For the quarter, however, gold has dropped nearly 24%.
The contract is nursing a weekly loss of nearly 6% and is also on track for a decline of nearly 13% for June.
Gold prices remained on a downward spiral Thursday, even as three officials from the U.S. Federal Reserve suggested the markets had overreacted after Fed Chairman Ben Bernanke’s remarks last week that the central bank may start slowing the pace of stimulus as early as this year.
Such a move would be based on improvement in the economy that is in line with the Fed’s forecasts, Bernanke had said.
Speculation that the end of Fed stimulus would arrive sooner rather than later hit gold futures hard this month, as so-called quantitative easing has been credited for supporting a rally in gold in recent years.
Among other most-active contracts in the metals space Friday, September silver rose 80 cents U.S. an ounce, or 4.3%, to $19.35 U.S., while the October platinum contract rose $1.90, or 0.1%, to $1,331 U.S. an ounce.
September copper rose two cents or 0.8%, to $3.08 U.S. a pound, and September palladium dropped $1.95, or 0.3%, to $648.75 U.S. an ounce.
