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Gold Lifts as Dollar Dips

June-dated gold contracts were adding $2.30 at $679.70 an ounce.

Gold prices moved modestly higher Thursday, spurred by the dollar's slide to a three-year low against the euro as investors worried about the strength of the U.S. economy.

June-dated gold contracts were adding $2.30 at $679.70 an ounce on the Comex division of the New York Mercantile Exchange.

"There is definitely a concern that Friday's jobs report will reflect that the U.S. economy continues to moderate and growth overseas continues to expand," says Randy Diamond, an analyst at Miller Tabak in New York. A new report from the Department of Labor, which showed a rise in new claims for unemployment insurance last week, helped spark the economic worries, he adds.

The weakness in the greenback vs. the euro was matched in the yen trade also. One euro was recently buying $1.3433, up from $1.3370 late Wednesday. One dollar was selling for 118.624 yen, vs. 118.69 previously. The price of gold and the value of the dollar tend to move in opposite directions.

Turning to the technical analysis viewpoint, at least one chart-watcher sees the beginnings of an upward move in bullion prices.

"streetTracks Gold Shares broke out to the upside Wednesday: the trend is clearly up," says Dennis Gartman, editor of

The Gartman Letter

. He sees

streetTracks Gold Shares

(GLD) - Get SPDR Gold Shares Report

, which represent a claim on a tenth of an ounce of bullion, trading up to the equivalent of a spot price of more than $680. Prices for immediate delivery of gold were recently around $673.

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Shares of the Gold Shares exchange-traded fund were recently trading down a penny, or nearly unchaged, at $66.80.

Turning to the precious metals patch, BMO Capital Markets dinged shares of Canadian miner

New Gold

(NGD) - Get New Gold Inc. Report

to a market-perform rating from outperform. Even so, the stock was rallying 2.5% in recent action.

As for base metals, copper was up 3 cents at $3.42 a pound on the Comex.

"On the copper front, we expect strength in the near-term (three months) outlook from strong physical demand related to restocking, seasonal uptick in demand, and additional short-covering," writes Amir Arif, an analyst at Friedman Billings Ramsey in Arlington, Va. Short-covering involves speculators who had sold futures contracts hoping to profit from a price drop buying back the instruments to close out their positions.

"Focus on the names with strong free cash generation," adds Arif, who points to shares of

Freeport McMoRan Copper and Gold

(FCX) - Get Freeport-McMoRan, Inc. Report

as good value over an 18-month time frame with its strong cash flow providing protection against possible weakness in metal prices in the second half of the year.

Freeport stock was recently lifting 0.9% to $67.67.