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Gold futures rose to a two-week high early Friday, before trimming gains to end little changed as investors booked profits ahead of the weekend and as some chart-based selling set in after prices failed to break above a key resistance level.
Prices remained supported amid ongoing indications of strong physical demand for the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were flat on Friday to settle the week at USD1,461.75 a troy ounce.
Earlier in the session, Comex gold rose to a session high of USD1,484.75 a troy ounce, the strongest level since April 15.
Gold prices were likely to find support at USD1,403.75 a troy ounce, the low from April 22 and near-term resistance at USD1,484.75, Friday’s high.
Despite Friday’s lackluster performance, gold futures rallied 4% on the week, the biggest weekly advance in three months.
Gold prices rose to the highest levels of the day after data showed that the U.S. economy grew less-than-forecast in the first quarter, underling expectations that the Federal Reserve will keep its loose monetary policy in place for the indefinite future.
The Commerce Department said U.S. gross domestic product expanded by 2.5% in the three months to March, missing expectations for growth of 3.0%.
But prices turned suddenly lower as some technical selling set in towards the end of the session, after futures failed to break above the USD1,485-level, triggering fresh sell orders amid bearish chart signals.
Indications of surging physical demand in the U.S. and Asia helped contribute to gains earlier in the week.
The U.S. Mint has sold 208,500 troy ounces of gold coins so far in April, the highest since December 2009 and up more three-fold from the 62,000 troy ounces the Mint had sold in all of March.
Buying interest also improved significantly in top consumers India and China, according to local bullion dealers.
Reports of central bank buying also benefitted sentiment. Russia, Turkey and Kazakhstan all added to their gold reserves in March, according to International Monetary Fund data released earlier in the week.
Comex gold fell to a 27-month low of USD1,322.25 an ounce on April 16. Since then, the yellow metal has climbed nearly 10% as investors returned to the market to seek cheap valuations.
Prices of the precious metal are still down almost 24% since hitting an all-time high of USD1,920.80 an ounce in September 2011, sparking fears that gold’s bull run is coming to an end.
In the week ahead, gold traders will be focusing on Wednesday’s Federal Reserve policy statement, for further hints regarding the future of the central bank’s monetary easing program.
Investors will be also be watching Friday’s U.S. data on non-farm payrolls, as they attempt to gauge the strength of the U.S. economy.
Any improvement in the U.S. economy could scale back expectations for further easing from the Fed.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank could bring quantitative easing, one of the biggest boosts to gold’s bull run, to an end this year.
Elsewhere on the Comex, silver for May delivery shed 0.8% on Friday to settle the week at USD23.94 a troy ounce. Despite Friday’s downbeat performance, silver future prices rose 3.15% on the week.
Comex silver rose to a session high of USD24.78 a troy ounce on Friday, before turning sharply lower after futures failed to break above resistance at the USD24.84-level.
Meanwhile, copper for May delivery tumbled 1.8% on Friday to close the week at USD3.180 a pound. The industrial metal came under pressure following the release of the disappointing U.S. GDP data.
Despite Friday’s heavy losses, Comex copper prices rose 1% on the week as investors close out recent bets prices will move lower, a move known as short covering.
Prices of the red metal are still down almost 20% since hitting a recent high of USD3.978 a pound hit in February 2012, meeting the standard for a bear market.
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