Gold ends higher, up 11% on month

Gold wrapped up January with an 11% advance on the month. Gold settled around $1,740 at the close of the month gaining .4% for the day. Gold dropped after change around the euro but picked back up again after a string of bad US economic data.

By Claudia Assis and Michael Kitchen
Jan. 31, 2012, 3:15 p.m. EST
Market Watch

SAN FRANCISCO (MarketWatch) — Gold futures on Tuesday ended a seesawing session at their highest in eight weeks, shaking off intermittent weakness to wrap up January with an 11% advance.

Gold for April delivery GC2J +0.38% rose $6, or 0.4%, to settle at $1,740.40 an ounce on the Comex division of the New York Mercantile Exchange.

The metal traded as high as $1,750.60 an ounce, and as low as $1,727 an ounce. Monthly gains for gold reached 11%.

After steep gains earlier in the day, gold fell, tracking losses for U.S. stocks and other commodities such as oil as the U.S. dollar strengthened.

“We dropped quickly on the change-around in the euro,” said Jim Steel, a precious metals analyst with HSBC in New York.

The dollar had turned higher after a string of negative U.S. data, putting pressure on dollar-denominated gold.

U.S. home prices slid 1.3% in November, a third straight drop. A gauge of consumer confidence slipped in January, partly reversing gains in the last two months. Read more on consumer confidence.

Late Tuesday, the ICE dollar index DXY +0.23% rose to 79.294 from 79.142 in late Monday trading in North America. Read more about currencies.

Still, gold regained its footing on the last hour of Comex trading. It had slipped by $1 on Monday on the back of a strengthening dollar. See report on Monday’s gold trade.

Gold took “a short breather” Monday, analysts at Commerzbank said in a note to clients. The 11% monthly gain comes on the heels of a decline around 10% in December, but a gain of 10% for the year.

European Union officials have agreed on a permanent bailout fund and on a fiscal compact but “many details remain unresolved,” Commerzbank analysts said. “The southern countries of the euro zone also seem to have pushed through exemptions allowing them some leeway with the fiscal compact and under certain circumstances to circumvent the rules.” Read more on Europe Markets.

Pressure continues on Greece, the International Monetary Fund, and private creditors to agree on a restructuring and a new bailout program.

“Even though the situation is now easing slightly and sentiment is improving, the crisis is far from over. This is likely to maintain a high level of demand for gold in particular,” the Commerzbank analysts added.

Technically, gold gathered more interest as it moved through some key technical levels such as higher moving averages, said George Gero, a vice president with RBC Wealth Management, in emailed comments on Tuesday.

Other precious- and base-metals futures turned lower, as the negative U.S. macroeconomic data contributed to take the wind out of stocks’ sails and, by extension, of other commodities such as oil and metals more closely linked to industrial uses.

March silver SI2H -1.15% declined 27 cents, or 0.8%, to $33.26 an ounce. On the month, however, silver gained 19%.

April platinum PL2J -1.73% lost $28.20, or 1.7%, to $1,588.10 an ounce. Monthly gains reached 13%.

March palladium PA2H -0.22% declined $2.15, or 0.3%, to $686.35 an ounce. The metal rose 4.6% on the month.

March copper HG2H -0.97% declined 4 cents, or 1%, to $3.79 a pound. Copper advanced 10% in January.

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