Global gold prices set for fourth week of gains
Gold prices on Friday held near three and a half month high that was reached in the previous session to remain on track for their fourth-straight weekly gain, with attention turning to US payroll data due later in the day.
Spot gold was down 0.1% at $1,321.86 an ounce at 9.06am. US gold futures were up 0.1% at $1,323 an ounce. Spot gold marked its highest since 15 September at $1,325.86 on Thursday on a weaker dollar. It has risen 1.5% so far this week.
Weighed down by the greenback’s weakness against the euro, the dollar index against a basket of six major currencies was poised for a loss of 0.3% this week, during which it probed a three-month low of 91.751.
“There are some new long-positions after gold crossed $1,300 and they are trying to push prices up ... We can see people buying at corrections,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. “The dollar will be the key to gold’s moves going forward ... Markets are waiting for more clues on the pace of the interest rate hikes and how the tax reforms are going to help the US economy.”
US private employers added 250,000 jobs in December, data from ADP Research Institute showed, the biggest monthly increase since March. Economists surveyed by Reuters had forecast a gain of 190,000 jobs. Investors are now focused on Friday’s US non-farm payrolls report, which is expected to show job gains of 190,000 for December.
Softer economic data weakens the case for a US rate hike, boosting gold, which is highly exposed to interest rates and returns on other assets. Rising rates lift the opportunity cost of holding non-yielding bullion.
Spot gold’s 14-day relative strength index (RSI) was at 73. An RSI above 70 indicates a commodity is overbought and could herald a price correction, technical analysts said.
Among other precious metals, spot palladium was steady at $1,096.40 after hitting a record-high on Thursday at $1,105.70. Palladium’s price jumped 56% last year on fears of a shortage fuelled by Chinese car sales growth, tightening emissions controls and a swing away from diesel cars in Europe.
Spot silver was down 0.1% at $17.21, after touching its highest in over six weeks at $17.27 in the previous session. Spot platinum rose 0.2% to $961.90 an ounce. It hit a 3 1/2-month peak at $965.40 on Thursday.