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Gold extends climb to highest level since February as dollar sinks to 2 1/2-month low

By Myra P. Saefong and Mark DeCambre

Gold prices climbed on Monday, headed for a fourth consecutive gain, supported by a fall in the U.S. dollar to a roughly 2 1/2-month low, as well as some weakness in the stock market.

The Nasdaq Composite has come under renewed pressure, said Dan Russo, portfolio manager at Potomac Fund Management, adding that this index was on the "verge of a relative breakdown" on Monday.

Some investors "may be using this breakdown as a signal to rotate out of the Nasdaq and into the areas of the market that are leading," including industrial metals and agricultural commodities, he told MarketWatch. "Precious metals such as gold are not leading yet, but they have been improving of late."

June gold was up $6.30, or 0.3%, to settle at $1,837.60 an ounce, after the most-active contract logged a 3.6% weekly gain. Prices extended a climb to the highest finish since Feb. 10, FactSet data show.

July silver also tacked on 2 cents, or 0.05%, to $27.49 an ounce.

"The near-term technical postures for both metals are also bullish, which continues to invite the shorter-term futures traders on board the long sides of those markets," wrote Jim Wyckoff, senior analyst at Kitco.com.

"The metals are supported by a slumping U.S. dollar index that hit a 2.5-month low overnight," he wrote.

The U.S. dollar was trading down 0.1% at 90.17, as measured by the ICE U.S. Dollar Index . It traded as low as 90.04, which is around the lowest for the index since late February.

A weaker dollar can help to support buying in commodities priced in the currency for overseas investors.

On Friday, gold booked the highest finish in almost three months after the U.S. Labor Department reported that the economy gained 266,000 jobs in April, (link) far fewer than even the most subdued forecast for the month, raising some questions about the strength and pace of the recovery from the COVID pandemic.

Among the other metals traded on Comex Monday, July copper lost 0.7% to settle at nearly $4.72 an ounce. July platinum tacked on 0.9% to $1,265.50 an ounce and June palladium added 1.5% to $2,968.20 an ounce.

-Myra P. Saefong; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

05-10-21 1352ET

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