Gold Rallies, But Gains Seen Limited

Gold Rallies, But Gains Seen Limited

Gold prices began their pre-market session on a positive note. However, a firm U.S. Dollar (CURRENCY:USD) might prevent any substantial upside in the metal’s prices today.

Stronger dollar could prevent higher gains

On the Comex, gold futures for June delivery were trading 0.35% higher at $1,275.60. Futures are likely to see support at $1,258.70 and resistance at $1,286.50. Several economic data releases lined up later today including retail sales, consumer sentiment, and producer prices will be critical to traders.

A day earlier, the U.S. Department of Labor reported an increase in jobless claims for the week ending on May 6. According to the report, the number of individuals filing for jobless benefits grew 20,000 to 294,000 from 274,000, a week earlier. The number disappointed analysts, who had predicted a fall of 4,000 to 270,000 last week.

Eldorado outperforms while Alamos disappoints

Eldorado Gold Corp (NYSE:EGO) first-quarter results topped analyst expectations. The gold miner reported $2.5 million in losses in the reported quarter, which translated into an earnings loss below $0.01 per share. Wall Street had projected an earnings loss of $0.01 per share. Revenues of the company came in at $164.1 million.

Unlike Eldorado, Alamos Gold Inc (NYSE:AGI) failed to meet the analyst expectations as it reported first-quarter earnings of $9.7 million. After adjusting non-recurring gains, earnings losses came in at $0.03 per share, higher than the estimates of $0.02 per share. Revenues of $104.3 million were reported during the quarter.

Meanwhile, BMO Capital Markets has gone bullish on the precious metals market, particularly gold. The tailwinds available to the gold segment will help its run-up over the medium term, according to BMO analysts. This outlook has led the research firm to upgrade its rating for several gold mining equities. One among the list is Yamana Gold Inc. (USA) (NYSE:AUY), the rating of which now stands revised to ‘Outperform’ from ‘Market Perform’.