Gold futures end higher, as dollar falls
By Polya Lesova, MarketWatch
Last update: 4:03 p.m. EDT April 21, 2008


NEW YORK (MarketWatch) -- Gold futures ended with a modest gain Monday, as weakness in the U.S. dollar boosted demand for the precious metal.

Gold for June delivery rose $2.40 to end at $917.60 an ounce on the New York Mercantile Exchange.
Earlier in the session, the contract surged to an intraday high of $931.40 an ounce.

In the short term, "gold looks set to spend more time in the $900 to $930 area, and remains vulnerable to a test back towards the April 1 low of $872 as speculators continue to take profit in order to increase their cash liquidity," wrote James Moore, an analyst at TheBullionDesk.com, in a research note.

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On Friday, gold futures dropped $27.70 to end at $915.20 an ounce. On the week, the metal posted a loss of $11.80.
"The lower weekly close in gold was bearish from a technical point of view," said Mark O'Byrne, executive director of Gold & Silver Investments Ltd., in a research note.

However, "with oil and the dollar remaining near record highs and record lows respectively and with physical demand internationally and particularly in Asia and China remaining strong, gold is unlikely to fall below $900 per ounce," he said.

On the currency markets, the dollar extended losses against most major counterparts, after Bank of America Corp.'s earnings shortfall reminded investors that the U.S. financial sector is not out of the woods yet.
Bank of America's (BAC:

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BAC 37.61, -0.95, -2.5%) first-quarter profit fell 77% as credit-loss provisions jumped $4.78 billion, driven by weakness in home-equity loans as well as credit extended to small businesses and home builders.

Hawkish comments from European Central Bank Governing Council member Axel Weber also supported the euro. Weber reportedly said inflation is likely to remain elevated and suggested the ECB might have to hike rates.

The dollar index, which tracks the greenback's performance against a basket of other major counterparts, edged down 0.2% to 71.79. See Currencies.

Crude-oil futures rose to a new record closing price of $117.48 a barrel, as weakness in the U.S. dollar and concerns over supply disruptions buoyed prices. See Futures Movers.

Gartman is "abandoning ship"
Dennis Gartman, editor of The Gartman Letter, a daily financial trading commentary, said Monday that he's abandoning his long held bullish outlook on gold.

"The relative strength of the market has been waning since early this year... a circumstance that has bothered us, but which we were willing to overlook so long as new highs were being made," Gartman wrote in his publication on Monday.

"They are no longer and as the market fails in that manner, it has broken this well-defined bullish trend line and it failed miserably on Friday," he said. "It has bounced today, and we shall sell that bounce and exit entirely!"

Gartman said that "good bull markets" don't fall in the way that gold and other metals fell on Friday.

"The precious metals gave up and broke hard on the smallest strength in the U.S. dollar, and we are fearful what might happen on real sustained dollar strength," Gartman wrote.

Also on the Nymex, May silver futures fell 46 cents to end at $17.36 an ounce and July platinum futures dropped $44 to finish at $2,027.30 an ounce. June palladium declined $10.90 to $462.50 an ounce.
May copper futures edged down 2 cents to $3.87 a pound.
On the equities side, the Amex Gold Bugs Index (HUI:
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Last: 448.18-7.99-1.75%
5:04pm 04/21/2008

HUI 448.18, -7.99, -1.7%) dropped 1.8% to 448.18points.
As for the sector's exchange-traded funds, the StreetTracks Gold Trust ETF (GLD:
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GLD 90.25, -0.37, -0.4%) fell 0.4% to $90.25, the iShares Silver Trust ETF (SLV:
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4:00pm 04/21/2008
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SLV 172.67, -4.04, -2.3%) declined 2.3% to $172.67 and the Market Vectors-Gold Miners ETF (GDX:
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Last: 48.72-0.58-1.18%
4:15pm 04/21/2008
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GDX 48.72, -0.58, -1.2%) dropped 1.6% to $48.50. End of Story
Polya Lesova is a MarketWatch reporter based in New York.

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