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1st LD Writethru: Gold up on technical trading

Xinhua, April 11, 2015 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Friday as technical reasons caused an increase in the demand of the precious metal.

The most active gold contract for June delivery rose 11 U.S. dollars, or 0.92 percent, to settle at 1,204.60 dollars per ounce.

Gold's upward momentum was caused by technical trading reasons. Analysts caution that they believe selling will happen, which, among other factors, is likely to dampen the rally.

A report from the U.S. Department of Labor released on Friday also put pressure on the price of the precious metal as it showed import prices fell by 0.3 percent in March, with the key reading down 0.4 percent. Analysts note that the change in the year-on- year rates have had the steepest decline since 2009.

The U.S. Dollar Index also put pressure on the precious metal as it rose by 0.48 percent to 99.45 as of 18:00 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

Analysts note that the overall outlook for gold is bearish due to the expectations for an eventual increase in the Fed's interest rate. After the interest rate is above zero, investors are likely to move to interest-generating assets like bonds or equities, as gold does not generate interest.

Silver for May delivery added 20.6 cents, or 1.27 percent, to close at 16.382 dollars per ounce. Platinum for July delivery rose 13.6 dollars, or 1.18 percent, to close at 1,170.60 dollars per ounce. Enditem