Gold firm as platinum heads for biggest drop in 10 weeks

Bengaluru — Gold held steady on Friday after posting its biggest one-day percentage fall in a month in the previous session, with gains curbed by a firmer dollar and a pullback in global equities on US-China trade tensions offering support.

Spot gold was flat at $1,285.01 an ounce at 10.17am GMT. US gold futures were little changed at $1,285.10 an ounce.

Spot gold fell 0.8% on Thursday, its biggest one-day percentage decline since April, as investors became a little more receptive to taking on risk following strong economic data from the US.

“On one end, gold has support from prevailing uncertainties in the financial markets relating to the trade talks and concerns over growth outlook. At the same time, the dollar is expected to stay strong for at least the next two weeks,” said Julius Bär analyst Carsten Menke. “Gold is expected to be rangebound.”

The dollar index rose, holding near a two-week high against a basket of currencies, making gold more expensive for holders of other currencies.

Meanwhile, world stocks pulled back after tough words on trade from China. The Communist Party’s People’s Daily used a front page commentary to evoke the patriotic spirit of past wars, saying the trade war would never bring China down.

A US move to block China’s Huawei Technologies from buying vital American technology further ratcheted up tensions over trade.

Meanwhile, Thursday’s sharp fall has dented the technical picture for gold.

“Bullion prices have broken the bearish trendline that had marked the last few months,” Carlo Alberto De Casa, chief analyst with ActivTrades, wrote in a note.

“A clear recovery to the $1,300 level, and prices holding above this psychological threshold, would confirm the supportive scenario seen in the past two weeks, while a fall below $1,280 would be seen as a negative element.”

Spot gold may break a support at $1,283 an ounce, and fall towards the next support at $1,264, according to Reuters technical analyst Wang Tao.

Among other metals, silver was down 0.7% at $14.46 an ounce, after hitting its lowest since December 7 at $14.42 an ounce. Silver is also on track for about a 2% decline for the week.

Platinum dipped 0.6% to $824.95 an ounce, having hit a two-month low at $818.50 earlier in the session.

Palladium, used in catalytic converters in car exhaust systems, slipped 0.8% to $1,320.43 an ounce. It has slumped about 19% since hitting a record high of $1,620.53 in March.

Both platinum and palladium are set to record weekly falls, with platinum on course for its biggest such drop in 10 weeks.