Gold rises, on course for a small weekly gain

London — Gold edged up on Friday as the dollar eased from a multiweek peak, with bullion seen consolidating in a narrow range supported by concerns about global growth and political uncertainties, including the US government shutdown.

Spot gold rose 0.2% to $1,283.69 per ounce, as of 11.03am GMT, holding in a tight range of about $6, and on course for a small weekly gain.

US gold futures climbed 0.3% to $1,283 per ounce.

“Gold seems to be finding a level and it is quite comfortable around it at the moment,” Capital Economics analyst Ross Strachan said, adding economic conditions still provided an underlying strength for the metal to surpass $1,300.

The dollar index fell 0.2%. The dollar is facing a tough year as growth at home and globally comes under pressure and the Federal Reserve moves closer to pausing its rate-hike cycle.

On an intraday basis, “gold is up due to a somewhat weaker dollar behind it”, said Commerzbank analyst Daniel Briesemann.

However, risks “from economic and political perspectives, are keeping gold relatively well supported going forward”, Briesemann added.

A synchronised global economic slowdown is under way and any escalation in the US-China trade war would trigger a sharper downturn, according to the latest Reuters polls of hundreds of economists from around the world.

Investors are also worried about the impact of the longest US government shutdown in history, now in its 34th day, with two bills to end the partial shutdown failing to win enough votes in the Senate.

Yet another key focus are developments surrounding the US-China trade front, with US commerce secretary Wilbur Ross stating on Thursday the two countries were “miles and miles” from resolving issues.

“We have seen quite a bit of asset reallocation in recent times, the exchange-traded fund holdings have risen quite substantially in recent weeks and months,” Strachan said.

Holdings of SPDR Gold GLD, the largest gold-based ETF, hovered around its highest levels since late June 2018.

Among other metals, palladium, which hit a record high of $1,434.50 an ounce last week on low inventories and rising demand, was down 0.3% to $1,315.64.

The metal was also heading for its first weekly drop in five, falling more than 4% so far this week.

Silver rose 0.4% to $15.38 per ounce, while platinum gained 0.2% to $802.19, on track for its first weekly gain in three. 

Reuters