Global gold prices on track for first weekly gain in three
Bengaluru: Gold prices held steady on Friday amid little change in the dollar ahead of key US economic data, but the metal remained on course for its first weekly gain in three.
“Most of the downside in gold this morning was largely due to profit-taking, but more importantly, market sentiment is still on the rosy side and in a more positive environment,” said OCBC analyst Barnabas Gan.
Spot gold rose 0.1% to $1,218.18 per ounce at 12.16pm. It was up 0.4% for the week so far, which would be its biggest weekly gain since early June.
US gold futures for August delivery fell 0.02% to $1,217.00 per ounce.
“I’m still bearish on my gold forecasts, but I think there are still some upside risks in the short-term, simply because there’s still some uncertainty on the horizon,” said Gan.
“The rate hike and the balance sheet tapering should inject a more positive growth outlook ... globally and that should push gold prices down to our $1,200 an ounce estimate by the end of the year.”
The number of Americans filing for unemployment benefits fell last week for the first time in a month and producer prices unexpectedly rose in June, likely keeping the US Federal Reserve on course for a third interest rate increase this year.
“We remain neutral on gold at this point as the dollar’s short-term trend is inconclusive, allowing higher yields to fill the space and throttle any gold rallies,” said INTL FCStone analyst Edward Meir.
The dollar was little changed against a group of peers early on Friday, as currency investors remained cautious ahead of US inflation data due later in the session. The dollar index was down 0.06% at 95.672 as of 12.06pm.
A stronger greenback would weigh on gold, making the dollar-priced commodity more expensive for investors holding other currencies.
Global stocks scaled record highs on Friday, with Asian equities rising for the fifth straight session, boosted by signs the Fed will pursue a gradual rate tightening path and hopes for a strong earnings season.
Meanwhile, holdings at the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell 0.43 percent to 828.84 tonnes on Thursday from 832.39 tonnes on Wednesday.
Among other precious metals, silver prices remained unchanged at $15.66 per ounce. Palladium rose 0.5% to $856.03 per ounce, set to end the week over 2% higher. Platinum rose 0.1% to $902.49 per ounce. Reuters